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Report on an investigation into allegations of impropriety and
unethical conduct relating to the installation and implementation of
security measures by the Department of Public Works at and in respect of
the private residence of President Jacob Zuma at Nkandla in the

KwaZulu-Natal province

Report No: 25 of 2013/14 • ISBN: 978-1-920692-15-5

PUbLIC PPOTFCTOP.
SOUTH AFRICA

Accountability • Integrity • Responsiveness

Website: www.publicp

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Executive Summary 4

1. INTRODUCTION 78

2. THE COMPLAINTS 80

3. THE POWERS AND JURISDICTION OF THE PUBLIC PROTECTOR 86

3.1 . Mandate of the Public Protector 86

3.2. The legal framework of the investigation 88

3.3. Balancing State Security Considerations with Open Democracy Requirements 92

3.4. Security Cluster objections to the investigation and preference for
investigations by the SIU and Auditor General 96

3.5. The Alleged Leaking of Information from the Provisional Report: 103

4. THE ISSUES CONSIDERED AND INVESTIGATED 106

5. THE INVESTIGATION 108

6. THE EVIDENCE AND INFORMATION OBTAINED DURING THE
INVESTIGATION 127

PART A: EVIDENCE ON THE SEQUENCE OF EVENTS 127

PART B: THE EVIDENCE ON THE GOODS AND SERVICES

PROCURED BY THE DPW 183

PART C: THE SUPPLY CHAIN MANAGEMENT PROCESS 192

PART D: EVIDENCE ON SPECIFIC ISSUES CONSIDERED

DURING THE INVESTIGATION 200

PART E: EVIDENCE ON THE INVOLVEMENT OF THE INDUSTRIAL
DEVELOPMENT CORPORATION AND ALLEGATIONS OF IMPROPER

BENEFITS AFFORDED TO THE PRESIDENT'S BROTHERS 253

PART F: THE INTERNAL TASK TEAM REPORT 263

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PART G: THE RESPONSES SUBMITTED BY THE PRESIDENT IN

REPLY TO QUESTIONS PUT TO HIM DURING THE INVESTIGATION 269

7. EVALUATION OF THE EVIDENCE AND INFORMATION OBTAINED
DURING THE INVESTIGATION 284

PART A: SEQUENCE OF EVENTS 284

PART B: THE GOODS AND SERVICES PROCURED BY THE DPW 292

PART C: THE SUPPLY CHAIN MANAGEMENT PROCESS 293

PART D: SPECIFIC ISSUES CONSIDERED DURING THE

INVESTIGATION 301

PART E: THE INVOLVEMENT OF THE IDC AND ALLEGATIONS OF
IMPROPER BENEFITS AFFORDED TO THE PRESIDENT'S BROTHERS 336

8. THE LEGAL AND REGULATORY FRAMEWORK 350

9. ANALYSIS AND CONCLUSION 387

10. FINDINGS 427

11. REMEDIAL ACTION 442

12. MONITORING 446

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"Given the very humble beginnings of this project, nothing short of a full township

establishment is now required. .."

(Comment of the Director: Architectural Service of the Department of Public Works addressed to
the Acting Director-General of the Department on the Nkandla Project at the end of August 201 0)

"Our government is the potent, the omnipresent teacher. For good or for ill, it
teaches people by example. . . If the government becomes a law breaker, it
breeds contempt for law; it invites every man [person] to become a law; unto

himself..."

Justice Louis D Brandeis, US Supreme Court Justice.

(i) "Secure in Comfort' is my report as the Public Protector of the Republic of
South Africa on an investigation conducted into allegations of impropriety and
unethical conduct relating to the installation and implementation of security
and related measures at the private residence of the President of the
Republic of South Africa, His Excellency J G Zuma, at Nkandla in the
KwaZulu-Natal Province.

(ii) At the time the remark of the Director: Architectural Services of the
Department of Public Works (DPW) is made, the cost estimation for the
project was R145 million. By the time I concluded this investigation R215
million had been spent while the total cost to conclude the project was
conservatively estimated at R246 million.

(iii) The investigation was conducted in terms of section 182 of the Constitution,
1996, which gives the Public Protector the power to investigate alleged or

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suspected improper or prejudicial conduct in state affairs, to report on that
conduct and to take appropriate remedial action; and in terms of section 6
and 7 of the Public Protector Act, 23 of 1994, which regulate the manner in
which the power conferred by section 182 of the Constitution may be
exercised. Part of the investigation was also conducted in terms of the
Executive Members' Ethics Act, 82 of 1998, which confers on the Public
Protector the power to investigate alleged violations of the Executive Ethics
Code, at the request of Members of National and Provincial Legislatures, the
President and Premiers.

(iv) The investigation was carried out in response to seven complaints lodged

between 13 December 201 1 and November 2012. The first complaint, from a
member of the public was lodged in terms of the Public Protector Act on 13
December 201 1 . Other complaints followed thereafter, also lodged under the
Public Protector Act. Further complaints were received from ordinary
members of the public and a year after the first complaint, a Member of
Parliament lodged a complaint under the Executive Members' Ethics Act.

(a) The first complainant requested an investigation into the veracity of
allegations published by the Mail and Guardian newspaper on 1 1 November
2011, under the heading: "Bunker, bunker time: Zuma's lavish Nkandla
upgrade". According to this media report the President's private residence
was being improved and upgraded at enormous expense to the state,
estimated at about R65 million. The impugned improvements allegedly
included a network of air conditioned living quarters, a clinic, gymnasium,
numerous houses for security guards, underground parking, a helicopter pad,
a playground and a Visitors' Centre.

(b) The earliest concerns regarding opulent or excessive expenditure at the
private residence of President Zuma were expressed on 04 December 2009

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by the Mail and Guardian in an article titled "Zuma's R 65 million Nkandla
Splurge". Apart from the release of a statement by the Presidency on 03
December 2009, denying that government was footing the bill, nothing seems
to have been done by government to verify the 2009 allegations or attempt to
arrest the costs which the article predicted would continue to rise. Three
years later and a year after a complaint was lodged with my office, the
Minister of Public Works appointed a Task Team of officials from the
departments involved in the impugned upgrades at the President's private
residence, to investigate specified matters in relation therewith. The Task
Team's report was released to the public on 19 December 2013.

(c) More items were added to the project after the concerns were raised in 2009,
bringing the cost from the initialR65 million, which was the subject of
complaint in 2009, to R215 million, which has since been spent, while
outstanding work is currently estimated at R36 million bringing the envisaged
total cost to R246 million.

(d) Some of the key questions in the written complaints were the following:

(1 ) "Where is the money coming from and how has it been approved?"

(2) "Whether any undue political influence was placed on the Department of
Public Works to allocate these funds.";

(3) "Who issued the instruction for the allocation of these funds;"

(4) "Whether these funds have been properly budgeted for;"

(5) "Whether any funds have been transferred from other much needed
projects for this revamp to take place;"

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(6) "Whether the allocation of funds for what is essentially a private home-
which will not remain within the state's ownership-represents irregular
expenditure. "

(7) "How can this amount of money be spent on a private residence of any
government employee"

(8) The additional complaints raised issues regarding the possible abuse of
Executive privileges, impropriety, extending benefits to relatives and
misleading Parliament.

(9) Included in the complaints were the following significant statements:

"I do not understand how this money can be spent on a private
residence of any government employee, especially when that employee
has two residences at his disposal in Cape Town and Pretoria. "

"Whether this construction is being performed for President Zuma as
President of SA or as a favour as ANC President, I would suggest it is
misuse of state funds to the benefit of a private individual, possibly to
curry political favour for the Minister of Public Works or a DG. When the
President is no longer the incumbent he is not entitled to state housing
but he will enjoy the benefits of the modifications to his private estate in
perpetuity . "

" While the majority of people in this country still struggle and fight for
survival it is deeply disturbing to discover that the President and some
of his close senior supporters feel that it is all right to abuse their
positions to benefit themselves and each other at the expense of the

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nation and all her citizens. These individuals, in their capacities as
servants of the people, should be held to task if they are in any way
guilty of wrongdoing, abuse of power or corruption. If the allegations in
the press on what is happening with the President's private homestead
in Nkandla are true then the President and those involved in facilitating
these massive renovations are possibly guilty of a number of
transgressions and should be held accountable. At the least these
allegations should be grounds for you and your team to conduct some
sort of investigation. " (emphases added)

(e) In essence the complainants alleged that:

(1) There was no legal authority for the expenditure that was allegedly
incurred by the state in respect of upgrades made at the President's
private residence in the name of security. Even if there was authority,
the upgrades were excessive or "opulent" and transcended such
authority.

(2) The procurement process was improper, in violation of the prescribed
Supply Chain Management policy framework and resulted in unduly
excessive amounts of public money being spent unnecessarily.

(3) The conduct of the President in relation to the implementation of the
impugned upgrades at his private residence may have been unethical
and in violation of the Executive Ethics Code.

(v) Based on an analysis of the complaints, the following issues were identified

and investigated:

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(1)

(2)

(3)

(4)
(5)

(6)
(7)
(8)
(9)

Was there any legal authority for the installation and implementation of
security measures and the construction of buildings and other items by
the state at the President's private residence and was such authority
violated or exceeded?

Was the conduct of relevant authorities in respect of the procurement of
goods and services relating to the upgrades, improper and in violation
of relevant Supply Chain Management prescripts?

Did the measures taken by the Department of Public Works (DPW) at
the President's private residence, go beyond what was required for his
security?

Was the expenditure incurred by the state in this regard excessive or
amount to opulence at a grand scale, as alleged?

Did the President's family and/or relatives improperly benefit from the
measures taken, buildings and other items constructed and installed at
the President's private residence?

Was there any maladministration by the public office bearers, officials
and other parties involved in this project?

Was there any political interference in the implementation of this
project?

Were funds transferred from other much needed DPW projects to fund
this project?

Is the President liable for some of the cost incurred?

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(10) Were there ethical violations on the part of the President in respect of
this project?

(11) Are there other maladministration issues that arose from the complaints
and the investigation process?

(12) Are there systemic deficiencies regarding the administration of benefits
of Presidents, Deputy Presidents, former Presidents and former Deputy
Presidents?

(vi) The investigation focused on security installations at the President Zuma's

private residence situated at a village known as Nkandla in Kwa-Zulu Natal
where he was born and spent most of his life, save for the years when he
was in prison and later exiled. President Zuma is the fourth President of
democratic South Africa. The security installations commenced shortly after
he was elected and sworn in during May 2009.

(a) The period covered by the investigation runs from the date of first
assessment of the requirements to upgrade the security at the President's
private residence on 19 May 2009 to the end of January 2014.

(b) The substantive scope focused on compliance with applicable laws and
policies in relation to security privileges accorded to Presidents, Deputy
Presidents, former Presidents and former Deputy Presidents; compliance
with Supply Chain Management prescripts; and the propriety of the conduct
of the President and others allegedly involved in the implementation of the
impugned upgrades.

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relating to the authority to implement the upgrades being the Cabinet Policy
of 2003 and the National Key Points Act, 102 of 1980 and those relating to
procurement, being section 217 of the Constitution, the Preferential
Procurement Policy Framework Act, 5 of 2000, the Public Finance
Management Act, 1 of 1999 and Treasury Regulations. In relation to the role
of the Department of Defence (DOD), the provisions of the South African
Defence Review of 1 998, and the Defence Act, 42 of 2002 were considered
together with institutional policies regulating the provision of medical support
and securing the President and others while in transit. With regard to
procurement, section 217 of the Constitution was applied.

(d) I was particularly mindful of the fact that the current regulatory framework

does not distinguish between permissible measures for securing the private
residences of Presidents, Deputy Presidents, former Presidents and Deputy
Presidents. In respect of the DOD I was further mindful of the fact that the
regime relied on for the provision of health care, being paragraph 22 of
Chapter 7 of the Defence Review, covers the President, Deputy President,
Minister and Deputy Minister of Defence and foreign dignitaries visiting South
Africa. In other words, if I were to reach a conclusion that what was done at
Nkandla was permissible for a sitting President, I would be saying that the
same measures are permissible for the others. This would inevitably lead to
questions of affordability and sustainability, not only in the context of the
current fiscal climate, but also in terms of balancing competing needs of
South Africa as a developmental state against the backdrop of section 237 of
the Constitution, which directs that "All constitutional obligations must be
performed diligently and without delay" and the Batho Pele, White Paper on
Transforming Public Service Delivery (1997) which undertakes to transform
an inherited insular state to one that puts people first as the true targeted
beneficiaries of public resources and services.

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(e) The conduct of the President was primarily assessed against the pursuit of

ethical standards imposed on members of the executive by section 96 of the
Constitution and the Executive Ethics Code issued under the Executive
Members' Ethics Act. To unpack the provisions of the Constitution and the
code, I took into account previous investigations of the Public Protector on
executive privileges notably the investigations that had scrutinized the
conduct of the Minister of Police in relation to accommodation privileges, the
then Minister of Cooperative Governance and Traditional Affairs on
accommodation and travelling privileges and the Minister of Agriculture,
Forestryand Fisheries on the same issues. With regard to the Minister of
Police, the findings of the Auditor General regarding alleged excesses in
relation to the construction of a security wall at his private homestead, were
also taken into account in compliance with laws and related standards
regulating the provision of medical support and securing Presidents and the
others while in transit, were also considered count.

(f) Consideration was also given to global benchmarks, principally on the role of

those entrusted with public power and resources regarding the exercise of
such power and balancing people's rights to resources and self-maintenance
privileges for 'trustees'.

(g) My approach to the investigation included the following measures:

(1) Correspondence, which commenced with alerting the Presidency to
the allegations in January 2012 and a letter of acknowledgement on the
same day. Further correspondence was entered with the Presidency,
the Ministers of Defence and Military Veterans, Police and Public
Works; the Deputy Minister of Women, Children and Persons with
Disabilities; Departments of Defence, Police and Public Works;

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Complainants and various parties involved in the project, including
contractors; and the Acting State Attorney. The latter wrote to me on 24
April 2013, advising on a suspension of my investigation, responded to
by the head of my private office on 10 May 2013, clarifying the legal and
constitutional position regarding Public Protector investigations and the
status of the current investigation at the time.

(2) Interviews conducted with Ms G Mahlangu-Nkabinde, the former
Minister of Public Works (telephonically) on 23 August 2013; Deputy
Minister H Bogopane-Zulu, who was the Deputy Minister of Public
Works at times material to the investigation on 14 May 2013; Officials of
the DPW, the South African Police Service (SAPS) and DOD, selected
contractors that were involved in the Nkandla Project. Meetings were
also held with President Zuma on 11 August 2013; Dr C R Lubisi, the
Director-General in the Presidency, in January 2012; The Ministers of
Police, Mr N Mthethwa, Public Works, Mr T W Nxesi and State Security,
Dr S Cwele on 22 April 2013, 31 May 2013, and 8 August 2013
respectively. The meeting of 31 May 2013 was also attended by the
Chief State Law Adviser, Mr E Daniels, and other high ranking officials
of the Departments involved; the Minister of Justice and Constitutional
Development, Mr J Radebe, who also attended the meeting of 31 May
2013; The Minister of Public Works on 2 July 2013; The Minister of
Defence and Military Veterans, Ms N Mapisa-Nqakula, who also
attended the meetings of 31 May and 8 August 2013; The former
Surgeon-General, Lt Gen V Ramlakan; and the Acting Chief of Staff of
the Ministry of Police, Ms J Irish-Qhobosheane.

(3) Analysis of voluminous documents such as correspondence;
applicable laws incorporating legislation and case law; relevant policies
regulating security upgrades at private residences; supply chain policies

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and supplementary prescripts and touch stones or established
principles from previous Public Protector Reports;

(4) An inspection in loco on 12 August 2013, aimed at verifying and
assessing the works implemented by the DPW at the President's private
residence, accompanied by the Minister of Defence, a member of the
investigation team and officials from the DPW and the security cluster;
and

(5) Submissions in terms of section 7(9) of the Public Protector Act by

parties that appeared to be implicated during the investigation.

(h) Limitations of the investigation:

(1) The investigation took approximately two years, which exceeds the one
year target the Public Protector South Africa team has set for complex
investigations. The delays can be attributed to:

1 . Internal capacity constraints;

2. Access to classified information;

3. Access to the report of the internal Task Team appointed by the
Minister of Public Works;

4. Objection lodged by the Minister of Police on 22 March 2013, later
supported by the Ministers of Public Works and State Security with the
assistance of the Acting State Attorney and the Chief State Law Advisor
to the investigation;

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(a)

(b)
(c)

5. General delays in access to information held by some departments
involved in the Nkandla Project; and

6. Requests for extensions to submit responses to notices issued in terms
of section 7(9) of the Public Protector Act.

(2) When the Executive Members' Ethics Act dimension was added in
December 2012, the 30 day period stipulated in this Act could not be
met, primarily because this was an addition to an existing extensive
investigation in terms of the Public Protector Act. Furthermore, the
abovementioned delays exacerbated the situation;

(3) Some of the parties that appeared to have been implicated by the
investigation were assisted by attorneys and advocates in their
responses and a total of seven attorneys and five advocates were
involved, some of whom tried to turn the investigation into adversarial
proceedings. Threats of interdicts were frequently made.

The following jurisdictional and process issues were raised by respondent
organs of state and implicated persons:

The authority of the Public Protector to conduct the investigation at the same
time while the Executive had decided on the agencies it wanted to conduct
the investigation;

The authority to investigate the conduct of a private consultant contracted by
the state;

The access to, scrutiny and review of the evidence and information obtained
during the investigation; and

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(d)

(viii)
(a)

(b)

The process followed during the investigation. In some cases there was a
lack of proper understanding of the provisions of the Public Protector Act.

Security concerns and litigation by the security cluster

The security nature of the project in question required an extensive
consideration of the legislation and other prescripts that regulate the security
classified information. In terms of the provisions of the Minimum Information
Security Standards Policy (MISS), this means that the information is
regarded as being of such a nature that its unauthorized disclosure/exposure
can be used by malicious/opposing/hostile elements to neutralize the
objectives and functions of institutions and/or the state

In essence I had to strike a balance between security on the one hand and
accountability and openness on the other. I took into account the provisions
of section 1(d) of the Constitution, entrenching accountability,
responsiveness and openness among other founding values of our
democracy.

My office took drastic measures to ensure that information that is sensitive
and classified was secured throughout the investigation.

I was further guided by what government had already made available in the
public domain. In June 2013 the Minister of Public Works in response to an
application in terms of the Promotion of Access to Information Act, 2000
provided the M & G Centre for Investigative Journalism with 1 2 000 pages of
documents from the DPW records relating to the Nkandla Project. All these
documents, including several that are classified, were published on the
Internet and are available at www.amabhungane.co.za.

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(e) In relation to the ethical considerations, I was faced with asking the President

the same questions that I had to ask of the former Minister of Cooperative
Governance and Traditional Affairs, the late Mr S Sicheka, and the Minister
of Police, Mr N Mthethwa, when I investigated allegations of unethical
conduct against them, i.e. did he raise any concerns about obvious
extravagant and expensive measures that were being implemented by the
state at his private residence? In Mr Mthethwa's case he questioned obvious
excessive expenditure and took steps to remedy the impropriety.

(ix) My approach to the investigation was to consider and evaluate what

happened, what should have happened and whether there was a
discrepancy between the two that constituted improper conduct and
maladministration, to rectify or remedy the impact.

(x) I now turn to the general conclusions I have reached on the 12 issues before

I proceed to my specific findings on each of them:

(a) Regarding the issue of legal authority to install security features at a

private residence at state expense and the allegation that such
authority may have been exceeded, the investigation revealed that:

(1) Security upgrades at private residences are allowed as privileges
accorded to members of the executive and other parties whose security
is essential to the functioning of the state, at the owner's request. In the
case of the President and Deputy President, the Presidency is also
authorized to make the request.

(2) The Ministerial Handbook regulates security installations for members
of the executive except for the President, Deputy President, former

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Presidents and former Deputy Presidents. The Cabinet Policy of 2003 is
the key policy instrument that has regulated security installations at the
private residences of Presidents, Deputy Presidents, former Presidents
and former Deputy Presidents during the period under scrutiny.

(3) Installations implemented in connection with health care services to the
President and transport, are regulated by prescripts guiding the DOD
Doctrines relating to transporting and providing medical services to the
President, Deputy President, former Presidents and former Deputy
Presidents.

(4) It was these two sets of regulatory frameworks that authorized the
installations undertaken in the name of security at the private residence
of President Zuma on assumption of office in May 2009.

(5) According to a Declaration Certificate issued by the Minister of Police,
the Nkandla private residence of President Zuma was a declared
National Key Point on 08 April 2010. Despite the Minister of Police and
the Presidency's denial in their submissions during the final phases of
the investigation, this added the National Key Points Act, 1980 into the
legal framework permitting and regulating security measures at his
residences. The specific compliance requirements with regard to the
National Key Points Act are stipulated in the Declaration Certificate
issued by Minister Mthethwa on 08 April 2010, declaring the Nkandla
residence a National Key Point and the receipt of which was confirmed
by the Presidency, a year later, on 07 April 201 1 .

(6) As indicated earlier, security measures at private residences under any
of the regulatory instruments are not automatic. In the case in point, we
have established that the measures implemented from May 2009 to

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April 2010 could have only been authorized by the Cabinet Policy as the
DOD prescripts do not cover any permanent security installations.
Paragraph 8.1 .2(b)(i) of the Cabinet Policy directs that such installations
be implemented "at the request of the President or the Presidency" (if
the residence belongs to the President) following a security evaluation
by the SAPS together with the National Intelligence Agency (NIA, now
SSA) advising that the security of the President is compromised as a
direct result of his or her public position.

(7) A Security Evaluation Report duly compiled by the Security Advisory
Service of the SAPS in May 2009 did conclude that the security
measures at the President's private residence were inadequate at the
time when he assumed office as President. The evidence of officials
from the DPW, SAPS and the DOD and our inspection in loco in August
2013 confirmed the need. This was despite the fact that Mr Zuma had
been the Deputy President between 1 999 and 2005. The situation was
said to be compounded by the fact that Nkandla is a deep rural area
with a rather unfriendly terrain.

(8) Looking broadly into the issue of compliance with the law and other
prescripts, no evidence has been presented or found indicating that the
trigger mechanism for the state to get involved financially, in respect of
any law, was complied with. We have already established that the
process started in 2009 and the President's private residence was only
declared a National Key Point in April 2010. Accordingly, the only basis
on which any state funds could have been used for security installations
at the President's private residence is the Cabinet Memorandum of
2003.

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(9) However, no evidence has been submitted or found indicating that the
Presidency requested the SAPS and State Security Services to
consider securing the private residence of the President, yet this is the
trigger mechanism stipulated in paragraph 8.1.2(b)(i) of the Cabinet
Policy of 2003.

(10) However, I was persuaded by the submissions by various
representatives of the organs of state involved in the security value
chain that the normative process is not to wait for a request from the
Presidency. I was advised that that action is taken to provide immediate
basic security while commencing a process of conducting a
comprehensive security evaluation as soon as a President is elected.

(11) The documentary evidence, which shows that the measures identified
as needing to be taken in response to the security evaluation at that
point were consistent with security measures identified in the standard
setting documents, among which are the Cabinet Policy of 2003 and the
Minimum Physical Security Standards. The procurement of such
measures were also costed as required, although not by the SAPS but
by the DPW and amounted to R27 million at the time.

(12) The evaluation above, herein after referred to as the first security
evaluation, had apparently not taken into account the fact that President
Zuma was in the process of constructing three new dwellings, which
required the broadening of the scope of the security measures. A
second and last security evaluation by the security experts within the
SAPS was also conducted and this still did not include the construction,
in the name of security, of buildings and other architectural items not
listed in the standard setting instruments for the provision of security in
identified private residences.

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(13) It would appear that the course of events changed significantly around
August 2009, when Mr Makhanya, the President's private architect who
had been involved in the President's non-security construction works,
was brought in, without going on tender, to act as the DPW's Principal
Agent in respect of the entire Nkandla Project, while retaining his
position as the President's Principal Agent and architect. This is the
period when the scale of work increased exponentially, leading to
installations that were not recommended in any of the authorizing
instruments or Security Evaluation Reports and the cost of works
escalating to over R215 million. It is also the point at which the Director:
Architectural Services at the DPW expressed concerns about moving
from "humble beginnings" to establishing a full township.

(14) By installing measures that were not based on the outcome of any of
the two security evaluations carried out using the Minimum Physical
Security Standards as requires and not quantifying and approving the
scope of measures before approaching service providers, the process
that ensued from August 2009 did not fully comply with the Cabinet
Policy of 2003, from which the authority to install security measures was
derived.

(15) The Cabinet Policy of 2003 requires:

(a) Request by the President or Presidency for security measures;

(b) Security evaluation by the SAPS and State Security Agency;

(d) A cost estimate prepares by DPW;

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(e) The SAPS to advise the Minister of Police on the proposed
security measures including the cost;

(f) Communication to the President on the approved security
measures for his or consent ; and

(g) Implementation by the DPW

(16) If the Cabinet Policy of 2003 was not complied with, how about the
National Key Points Act? The Presidency and SAPS have since argued
that there was no need to comply with the National Key Points Act. This
is despite the fact that in submissions to Parliament and media
statements, the National Key Points Act was used, primarily by the
current Minister of Public Works, to justify the installations and related
expenditure at President Zuma's private residence.

(17) According to the Declaration Certificate issued by the Minister of Police,
Mr Nathi Mthethwa, on 08 April 2010, the security installations at the
President's residence were supposed to be handled in terms of the
National Key Points Act. Since work was already in progress, the
directive in the declaration was to presumably apply from that date
onwards. Unfortunately the organs of state involved have failed to
address me on what was intended arguing, in a very strange way that
that the act of bringing in the National Key Points Act was to secure
what had already been built in the name of security.

(18) Nonetheless, if I am right in arriving at the logical conclusion that the
instruction in the declaration was meant to regulate installations and
responsibility for payment thereof from April 2010, then everything that
was done from that point onwards was in terms of the Declaration
signed by the Minister of Police, not meant to be funded by the state but
paid for by the owner, President Zuma. This conclusion is arrived at on

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the basis of the contents of the Declaration Certificate in question,
which includes the following:

"The total safeguarding of a National Key Point comprises not only the
measures which you as owner are obliged to implement in terms of
section 3(1) of the National Key Points Act , but also the effective
protection which must be implemented by the protection unit. It is
therefore of the utmost importance that either you or a person appointed
by you, liaise with the protecting unit of this National Key Point and the
Provincial NKP Officer to activate a Joint Planning Committee(JPC) for
this National Key Point in order to draw up a joint plan to counter an
incident .

In terms of Section 24D of the Income Tax Act, you can submit a claim
for tax deduction in respect of expenditure incurred on security
measures implemented at your National Key Point. . .

It is trusted that you will implement your security obligations as defined
in section 3(1) of the National Key Point Acts, Act 102 of 1980, at your
National Key Point." (emphases added)

(19) The Minister of Police's declaration proceeds to advise the owner, who
in this case is President Zuma, that: "This directive contains all the
information you will need in reference to the administration and
safeguarding of your NKP. Please study it carefully." It concludes with
advice that "If the circumstances of your NKP should change to such a
degree that its status as a NKP is affected, you must inform the NKP
Section so that a re-evaluation can be carried out. "

(20) No evidence documentary or otherwise indicates that the Minister of
Police's decision to have the owner fund the security measures was

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revoked or the NKP's situation was reported as significantly changed or
re-evaluated.

(21) The respondent parties' response to the question regarding how and
why the post April 2010 security measures were funded by the state,
was simply that, the declaration was never meant to affect the regime
that ordinarily applies to the security of Presidents and the other
selected dignitaries. I had to consider the possibility that the National
Key Points Declaration could have been meant to cover some of the
items that were neither mentioned in any of the standard setting
instruments nor included in the lists made by the security experts
following the two security assessments.

(22) The possibility that sections 3(2) or 3A of the National Key Points Act,
which gives the Minister of Police the power to pay with state funds in
the event an owner is unwilling or unable to pay, was eventually used
as the basis for tapping into state funds and, was also explored despite
protests from all affected organs of state. Despite not denying that he
signed the National Key Point Declaration dated 8 April 2010, asking
the President to pay for his own security upgrades, Minister Mthethwa
said, in his response to the provisional findings:

"Any contention that the President was required to implement security
measures at his private residence at his own expense for his own safety
and security is misguided and incorrect"

(23) Incidentally, the same difficult-to-fathom view was taken in the
Presidency's response to the provisional report. When I asked the
President's legal advisers, what the declaration was asking the
President to pay for and if he paid for same, I was advised that he had

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not paid for anything and should never have been asked to pay for
anything. Perhaps that is true but the reality is that he was asked to pay.

(24) From the investigation's point of view, the apportionment of costs path
was explored primarily because there was evidence of a draft
apportionment letter prepared at the request of Ms. Hendrietta
Bogopane-Zulu, the Deputy Minister of Public Works at the time.
Unfortunately although the Deputy Minister confirms requesting the
letter and the evidence shows that it was duly prepared she could not
confirm that it was sent to the President. Neither could Ms. Gwen
Mahlangu-Nkabinde who was the DPW Minister at the material time.

(25) There is clearly no evidence of a decision made by the Minister of
Police as required by law to act in terms of the apportionment regime. It
must also be indicated, as pointed out by the Presidency that,
apportionment is an option. Otherwise, the state may under the National
Key Points Act still pay for everything. This takes me back to the view
that the owner's contribution may have to address the matters that were
added to the security menu after the security evaluations were done
and a final list prepared on what was absolutely needed for security
purposes and the DOD related needs. The minutes of the meeting held
on 1 1 May 201 1 where it was said a decision on the swimming pool is
outstanding pending consultation with the owner as it has cost
implications for him provide one of the pieces of evidence that gives us
a glimpse of the thinking behind apportioning some of the costs to the
owner. In the minutes of various progress meetings of the Project Team
there is consistent reference to non-security items for the owner's
account, as the elephant in the room.

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(26) Another piece of the puzzle that points us in the direction of the owner
footing an undetermined part of the bill is minutes of meetings held by
the Project Team. The minutes of the Project Team meeting dated 1
April 201 1 , where the question of apportioning of costs was discussed,
reveal an agreement reached for a document outlining such
apportionment to be prepared for submission to President Zuma. The
evidence of the former Deputy Minister of Public Works, Ms. Bogopane-
Zulu, alluded to earlier, buttresses the existence of such an agreement.
In the body of the report I deal extensively with her lamentation that she
was unceremoniously removed from the project, an allegation not
denied by the Minister at the time, Ms. Mahlangu-Nkabinde, whilst still
wearing travelling clothes upon landing, from an overseas trip, Ms.
Bogopane-Zulu indicated that she never saw or heard about the
apportionment document she had requested upon departure following
her discussion on the same with President Zuma.

(27) Although the minutes of a progress meeting confirm its existence and
the investigation did unearth a copy of a document that purports to be
the apportionment document and with items for the President's bill
allegedly ticked by Mr Makhanya, the fate of the original remains a
mystery as Ms. Mahlangu-Nkabinde submitted that she had never seen
it despite admitting to taking over the prestige portfolio, which included
the Nkandla Project, after her abrupt removal of her deputy from same.

(28) However, I must say that the disappearance of the document amid a
situation where virtually all the members of the executive involved
appeared conversant with its contents is a source of grave concern. It
is clear that at the level of the Project Team the document was
produced and delivered but at a political level, it seems to have been

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managed in a manner that removed it from the normal administrative
decision-making process or track.

(29) What is clear though is that there is no document through which the
Minister of Police revoked his decision. Furthermore his submission and
that of the Presidency did not argue that such revocation occurred.

(30) The procedural question that arose during a consideration of the
apportionment of costs issue was whether or not the owner was
consulted as required by the law. What we know, according to the
Declaration is that President Zuma was informed that he was to pay for
everything. Curiously though, the President appears to have been
informed of such National Key Point Declaration, a year after it was
made, on 07 April 201 1 . At what point was he told he would have to pay
for some of the items, and for which of those, is not clear.

(31) The only evidence uncovered that suggests the owner was informed or
attempts were made to inform him of his partial payment obligations is
the document purporting to be an apportionment of costs document and
the testimonies of Deputy Minister Bogopane-Zulu and the former
Regional Manager of the Durban DPW Regional Office, Mr Khanyile.
However, that document was only prepared around the beginning of
2011 and there is inconclusive evidence regarding its delivery to
President Zuma.

(32) The body of the report also deals with purported security installations on
state land near the President's homestead, implemented by the DOD at
the expense of the DPW. I must indicate upfront that these have
emerged as extraneous to the regime for providing security to the
President and selected dignitaries. They belong to a DOD-regime

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regulating medical services and transport services to the President and
specified dignitaries.

(33) This is the murkiest of all areas. The first thing to note is that no policy
instrument that clearly stipulates in exact items which can be funded at
state expense in the name of providing mobile security to the President
was provided by government during the investigation. Precedent also
does not help as all predecessors mainly got security assistance at
private residences that is mostly limited to the items listed in the security
guides. The only difference is former President Mandela whom around
2010, long after retirement and about 3 years before his passing on, got
a mobile ICU unit, which will now revert to the state.

(34) At the Nkandla residence, the items attributable to the SAPS include
the relocation of households of neighbours at state expense, apparently
because Mr Makhanya's advice was that a straight fence would provide
better security than one that goes around these homes. Here it must be
borne in mind that the security evaluations did not recommend this.
Furthermore Mr Makhanya is an ordinary architect and not a security
expert or advisor. His ticket to the project was on account of non-
security related architectural work he was performing for his client, the
President, shortly before the Nkandla Project commenced. It must also
be noted that the meandering fence and proximity of these households
was never identified as a security threat in the two security evaluations
conducted by security experts in accordance with the rules and which
are the only security assessments ever conducted in respect of the
Nkandla Project.

(35) It is particularly worth noting that if the National Key Points Act were to
be viewed as the key authority instrument authorizing the impugned

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security measures, these households could have simply been included
inside the secured area as part of a National Key Point Precinct, as
envisaged in section 2A of the Act. This would have meant a straight
fence with these homesteads inside the enclosure. There is no
evidence that this option was ever considered.

(36) It is further worth noting that the organs of state involved did not invoke
any law, including the Expropriation Act, 1975, as the basis for moving
the households at state expense. The argument that this was a security
requirement is not borne by the documents prepared by security experts
following the two security evaluations. The fact that the families did not
want to move on account of, among others, their family gravesite, does
not negate the fact that they benefited from better buildings at state
expense.

(37) I have noted with concern the submission by Deputy Minister
Bogopane-Zulu during her interview that she had advised that the
Minister of Human Settlements be approached with a request to build
RDP houses for the affected households. This would have cost between
R100 000 and R120 000 per house, which would have been less than
R2 million for the four households instead of the R8 million that has
since been paid for the 15 rondavels that have been built for them. This
cheaper option was not explored by the DPW. Regarding maintaining
the rondavel style of the original homes, RDP houses can be adapted to
any low cost architectural design.

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(b) Regarding the alleged flaunting of Supply Chain Management

procedures stipulated in the relevant regulatory framework, the
investigation revealed that:

(1 ) It is common cause that despite the expenditure of an amount in excess
of R215 million that was spent by the DPW on the Nkandla Project, the
prescribed open tender process was not utilized for the procurement of
the goods and services required at any stage of the project. Treasury
requirements require that all goods and services between R10 000 and
R500 000 be subjected to three quotations and above R500 000, to an
open tender process. Most of the deviations from the prescribed open
tender process were justified in internal memoranda and minutes of
meetings citing:

1. The fact that a particular service provider was appointed by the
President and that there was a need to integrate the project with the
President's private works;

2. Security;

3. Instructions from the Minister of Public Works;

4. Urgency; and

5. Indications that the service/product required was only available from
one supplier.

(2) Only nominated and negotiated procurement strategies were utilized,
and in some cases there were direct contractual appointments of
service providers.

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(3) According to the DPW records, the procurement without tender
processes also covered works referred to as "general site works",
amounting to more than R67 million and which included the installation
of lighting, data and CCTV networks, access control facilities, bulk earth
works and landscaping. Mobile accommodation for the SAPS staff and
mobile generators were also procured without a tender process.

(4) I have had great difficulty understanding why Mr Makhanya and the
other consultants and contractors brought in on account of prior
involvement in President Zuma's private renovations, were considered
key to the work relating to the helipads, the clinic, homes for SAPS
members, the relocation of households and most of the general site
works. Most of these measures were unrelated to the private
renovations by the President and were executed outside his private
property.

(5) According to his written statement presented to me dated 30
September 2013, the President was present when Mr Makhanya, was
introduced to the DPW team at his house in Nkandla in August 2009.
The President has since submitted that he never insisted that
Makhanya and others he had already engaged privately had to be
engaged for the Nkandla Project. He explained that he simply
participated in a meeting the purpose of which was:

"Only to introduce my architect to senior government officials and to
appraise each other of their respective plans"

(6) It is common cause that Mr Makhanya not only served as principal
agent for both the President's private work and the state funded the

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Nkandla Project. It is also common cause that he served as overall
architect, providing subcontractors to the Nkandla Project while serving
the President as his private architect. Also not denied is the fact that Mr
Makhanya throughout the Nkandla Project served as the go-between
between the government officials and the President, leaving it to him to
discuss designs with and explain the President's preferences. What is
particularly disturbing in this regard, is that the minutes show that Mr
Makhanya was often asked to design something more economic and he
would come back with something more expensive or even luxurious and
then make a submission regarding why the 'security' need had to be
met through the more costly design. An example in this regard is his
decision to change the design and move the location of the safe haven
at a significant increase to the cost. No explanation was given regarding
why the government had to consult the President through Mr
Makhanya, a consultant.

(7) Despite denials by the Presidency, the appointment to design and
implement security features at the President's residence placed the
service providers who were also appointed by the President in a
position of dual responsibility to the President and to the DPW. Although
denied by the Presidency, I am unable not to conclude that this
presented a risk of conflict of interest. This was particularly the case
with regard to Mr Makhanya, whose new role as Principal Agent for the
entire Nkandla Project meant that he became the state's main advisor
on what it would take to cost effectively meet identified security
requirements while maintaining his status as the President's architect
and advisor. In fact the DPW never explained why Mr Makhanya had to
be the Principal Agent for the entire project other than to indicate that he
was already involved in the President's private works.

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(8) Mr Makhanya's third role as the main go-between between the
President as owner and the Project Team also placed him in a position
of serving the interests of two masters. The Presidency has argued that
there is no evidence that the interests of the two masters were
conflicting. That may be so. What we do know though is that many of
the modest measures originally recommended by the security
evaluation or agreed to at project meetings, ended up being replaced
through the designs of Mr Makhanya and team under him, by more
expensive measures.

(9) The placing of Mr Makhanya between the Project Team and President
Zuma evidently shifted power from state officials to Mr Makhanya. In his
written submission, one of the "officiaf project managers stated that Mr
Makhanya became the de facto project manager and that it was difficult
to exercise control over him leading to a case of "the tail wagging the
dog". It is not difficult to comprehend why government officials,
particularly at a fairly low level of the food chain, would have difficulty
controlling a consultant who was presented by and claims to speak with
the President's concurrence or authority. My opinion is that even a
Minister could have had difficulty countermanding Mr Makhanya.

(10) Both minutes of the project and interviews reveal a picture of knee jerk
reactions during which team members would come up with an idea at
any time, thereafter Mr Makhanya was asked to design a feature that
could capture that idea and between him and his quantity surveyor have
it costed, the subsequent meeting would then simply adopt it. During the
inspection in loco, the team deferred to Mr Makhanya, who battled to
explain items such as the amphitheatre, the kraal, which includes a
chicken run and cattle culvert, the Visitors' Centre, the swimming pool,

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extensive paving and the relocation, at state expense, of the President's
neighbours.

(11) Having a contract that paid him on the percentage of the cost of the
measures installed also presented a risk of conflict of interest for Mr
Makhanya as choosing the most expensive option meant more money
as did expanding the scope of the work involved. Mr Makhanya had
made R16,5 million from the Nkandla Project by the time of conclusion
of the investigation.

(12) Coming back to the issue of procurement, I have indicated that the
minutes of meetings and interviews with the parties, clearly show that
many of the procurement procedures were skipped, ostensibly on
account of urgency. I am not convinced that urgency prevented the
procurement of services on the basis of shortened tender turnaround
times as provided for in Treasury Regulation 16A6.4.

(13) Mr Khanyile, the former Regional Manager of the Durban Regional
Office of the DPW, conceded during in his evidence, that from the time
the project commenced, the procurement procedures followed were
different from the norm usually applied by the SAPS, the DOD and the
DPW. He conceded that these organs of state failed to comply with the
prescribed standards of proper demand management and budgeting.
The Minister of Public Works has, in his official statements, also
conceded this point. The Task Team of officials from DPW, SAPS and
the Security Ministry also confirmed the same, in its findings.

(14) The evidence of the officials involved in the Nkandla Project indicated
that they erroneously accepted that due to the fact that the project
related to the security of the President, which was urgently needed, and

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because it was driven from the DPW Head Office and the Ministry of
Public Works, the deviation from the norms was justified and not to be
questioned.

(15) The evidence of the officials was corroborated by the Acting Director-
General of the DPW, Mr Malebye, who took responsibility for the short
cuts. Furthermore, his involvement at trench level, when the project
commenced, and later that of a Deputy Director-General, the Deputy
Minister and the Minister, the officials at the Durban Regional Office that
were mainly responsible for the implementation of the project, did create
confusion regarding roles and accountabilities for procurement
decisions.

(16) In approving a request from Mr Khanyile submitted in an internal
memorandum dated 9 October 2009, Mr Malebye even went so far as
to allow a deviation from the internal DPW directive that all
procurements above R20 million had to be approved by the DPW
Special National Bid Adjudication Committee (SNBAC), and delegated
unlimited and unconditional authority in respect of the Nkandla Project
to the Regional Bid Adjudication Committee (RBAC) based at the
Durban Regional Office.

(17) In his capacity as the accounting officer, he also approved the
appointment of consultants and contractors for millions of Rand by
means of nominated and negotiated procurement strategies. This does
not cater for proper competition and selection, on the basis that the
Nkandla Project had to be fast tracked.

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(18) Despite all the deviations justified on urgency, the project started off
quite slowly and, according to the evidence of the Project Manager, by
January 201 0, not much had been done.

(19) According to the SAPS, the President started complaining by March
2010, about the slow progress. The President did the same from May
2010. By then, little had been achieved despite the fact that the project
was already a year old and procurement requirements had been
flaunted ostensibly on the basis of urgency.

(20) The evidence further shows that financial planning for the Nkandla
Project was also not attended to by the SAPS, DOD and DPW.
Furthermore, by June 2010, no funding had been allocated to the
Nkandla Project for the applicable financial year, resulting in the
reallocation of the DPW Capital Works budget.

(21) The scale of the project increased exponentially in terms of number of
items, size of measures and the size of President Zuma's homestead.
In the construction industry a runaway project scale is referred to as
"scope creep". Scope creep is primarily attributed to lack of or poor
demand management and failure to manage service providers, who are
known to find ways to expand their brief leading to greater cost and
extended periods of engagement. Some of the dimensions of the scope
creep were consequential to the constant add-ons to the original list of
security measures. For example, one of the consequences of the
measures constructed beyond the list compiled on the basis of the two
security evaluations was that the soil was disturbed significantly leading
to a decision by the Project Team in August to employ the services of a
Landscape Architect to advise on the rehabilitation of the land. This was
not part of the original idea. No wonder the Director: Architectural

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Services at DPW advised the Acting Director General, at that point,
that:

"Given the very humble beginnings of this project, nothing short
of a full township establishment is now required..." (emphasis
added)

(22) Failure to ensure demand management as an essential part of Supply
Chain Management is one of the factors behind the runaway costs of
the Nkandla Project. Due to the fact that no proper initial planning of
and budgeting for the project were done by the departments involved,
the scale and cost of the project were clearly without boundaries. As
more requirements were raised by the departments and other role
players involved, more designs by the professional consultants were
added, cost estimates prepared accordingly and funds within the DPW
budget reallocated without independent evaluation from persons outside
the project. The minutes show that Deputy Minister Bogopane-Zulu,
tried to contain both scope creep and price escalation, during her short
stint although she too was, by her own admission, responsible for small
dimensions of the scope creep and cost escalation. She admitted to
having supported the idea of turning the fire pool into a swimming pool
on being assured the cost difference would be nominal and to ordering
permanent brick and mortar quarters for SAPS personnel near the
premises instead of the accommodation they then occupied.

(23) Ms G Pasley, Chief Quantity Surveyor of the DPW, raised her
concerns about the escalation of the costs of the Nkandla Project in an
email message sent to Mr Rindel, on 3 December 2010. She stated,
inter alia, that:

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"The scope of work and estimated costs have increased considerably over
the past four months and continue to change which has given rise to further
cost increases as can be seen from the budget reports already submitted
by the consultant team and which are currently in the process of being
revised again. The estimated costs have almost doubled over this period
and it is essential that the parameters in respect of the scope of work and
the budget are established and confirmed. Information pertaining to the
exact apportionment of work and costs is critical in order that a detailed
cost analysis can be done by the consultant Quantity Surveyors within the
confines of the budget." (emphasis added)

(24) The records of the DPW and the evidence of the officials that were
involved in the implementation of the Nkandla Project show that the
SAPS Security Advisory Service did not play a significant role in the
design of the project. It submitted certain proposals, but the ultimate
design details were left in the hands of especially Mr M Makhanya, the
architect and Principal Agent, irrespective of the costs involved.

(25) The evidence suggests that the focus of the Project Team from the start
of the project was on creating an ideal situation, rather than a
reasonably safe and affordable one. An example of no attention to cost
effectiveness is the cattle kraal with a culvert and chicken run. When
asked, during the inspection in loco, why a cattle culvert and chicken
run, Mr Makhanya said "this is how they do it in England'. Moving the
kraal, if it had to be moved, to the outer perimeter as is the case in the
owner built kraal at the late President Mandela's homestead in rural
Qunu, appears not to have been considered. Similar questions arise
with the safe haven, which based on initial cost estimates, was originally
conceived as a simple safety measure that would have cost under R1
million.

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(26) Brigadier Adendorff, the Head of the Security Advisory Service of the
SAPS and SAPS' principal representative in the Nkandla Project,
confirmed during her evidence that in her view, the SAPS did not pay
attention to cost, understanding itself as having no role in such costing.
She submitted that she understood this to be the responsibility of the
DPW. She also confirmed that she had not operated according to the
Cabinet Memorandum or the National Key Points Act. Had she been
aware of the law, she would have known that both the costing and
financing are the responsibility of the SAPS, except for the DOD related
measures.

(27) Lt General Ramlakan, who was the head of the South African Medical
Services in the Department of Defence, also made a similar submission.
With the support of two counsels, he contended strongly that he
understood his role as having been confined to making a wish list and
for DPW to adjudicate on that list, procure and provide what it chooses
to provide and pay for such from its own budget. Despite presenting
himself as the expert even questioning my own competency to question
what he requested, he maintained that it was not his place to ensure
that the needs identified in relation to military health services in support
of the President, his family and military staff deployed in Nkandla, were
addressed through the most cost effective measures.

(28) It is difficult not to reach the conclusion that a license to loot situation
was created by government due to a lack of demand management by
the organs of state involved as provided for in the Cabinet
Memorandum, the National Key Points Act, relevant health care and
transport regulations as well as National Treasury Guides and directives
on procurement. Treasury prescripts clearly require government not to

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go to the market with a blank cheque licensing service providers to
simply fill the blanks relating to scope of work and amount to be paid. In
the words of the Project Manager, Mr Rindel: "It was like building a
puzzle without a picture" and the Project Team "wrote the rules as they
went along".

the President's residence transcended what was required for his
security:

(1 ) The evidence gathered focused on the standard setting instruments and
their provisions regarding the minimum security requirements. The lists
of security measures compiled at the conclusion of security evaluations
were also taken as standard setting. The President's lawyers conceded
during the meeting on 21 February 2014 that the deciding factor or what
had to be implemented in the name of security were the lists prepared
by security experts following the security evaluations.

(2) However, even where measures were neither mentioned in the
standard setting instruments nor in the lists compiled by the security
experts, I still gave consideration to the judicious exercise of discretion
by relevant state actors to address incidental needs.

(3) With regard to security measures inside the residence and relating to
fencing, the security verification was made easier by the existence of
the Cabinet Policy of 2003, the Minimum Physical Security Standards
and the SAPS Security Evaluation Reports compiled in conformity with
the Minimum Physical Security Standards.

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(4) Based on the items listed in the Minimum Physical Security Standards
and the lists compiled in pursuit of the security, evaluations left with no
basis for accepting as security measures items such as the kraal,
chicken run, Visitors' Centre, amphitheatre, swimming pool and
extensive paving as these were not among the listed items.

(5) While conceding the point made by the President in his written
submission of 14 February 2014, his lawyers during our meeting, DPW
and the security cluster, that I am not a security expert and accordingly
cannot second guess security experts, the evidence shows that these
items did not come from security experts. As indicated, they were
neither on the list in the Minimum Physical Security Standards
Instrument nor the list developed by the security experts in pursuit of the
security evaluations. Furthermore, the minutes of the Project Team
meetings show that their inclusion was principally in the advice of
civilians in the Project Team.

(6) My understanding is that my role is not that of a security expert but that
of public scrutiny to ensure that those entrusted with public power do
not exceed the bounds of their authority. In other words I'm exercising
administrative scrutiny in the exercise of state power much the same
way as judicial scrutiny. Do I need an expert to help me understand the
decisions made and justifications given by actors such as Mr Makhanya
and General Ramlakan (who presented themselves as experts in their
respective fields) for recommending measures beyond what were in the
Minimum Physical Security Standards Instrument and the lists from the
security evaluations? Not in the case of the items in question, as there
are precedents from previous Presidents.

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(7) Having accepted that for incidental measures, discretion, although not
expressly authorized, had to be exercised, I had to determine how I was
to adjudicate the judiciousness of the exercise of such discretion. In this
regard, I found myself relying on the quality measures at residences of
President Zuma's predecessors and the submissions made by the
Project Team, which for whatever reasons, primarily deferred to Mr
Makhanya for internal perimeter installations and Lt Gen Ramlakan for
the works outside the land leased by the Zuma family.

(8) Let us take the cattle kraal. President Mandela's is an ordinary kraal
built by himself far from the main yard thus not interfering with motion
detectors in the inner perimeter. No swimming pool was built for him. I
am also not aware of any Visitors' Centre. In any event, the minutes of
the Project Team meeting dated 1 1 May 201 1 show that the thinking at
the time was that the swimming pool would have cost implications for
the owner hence Mr Makhanya was assigned the task of consulting
President Zuma in this regard.

(9) Having listened to the submissions and measured these against
measures in the private homes of previous Presidents and in the
absence of any security evaluation report listing such measures, I had
serious difficulty understanding the basis for classifying the following
items as security measures:

1. Inside the private residence: The Visitors' Centre, Cattle Kraal,
Chicken Run, Amphitheatre, Marquee Area and the Swimming Pool. All
I did here was to ascertain from the relevant state actors what the
proximity of such non listed measures to the list in the Minimum
Security Measures Instrument and the lists prepared in pursuit of the
security evaluations were. I also engaged them on whether or not

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cheaper but equally effective measures had been considered. The
arguments made were simply not convincing as the discretional security
concerns sought to be addressed could have been addressed through
much cheaper options. Furthermore, the minutes of progress meetings
show that there was some debate on the inclusion of these. Some
minutes specifically state that some of these fall outside the mandate of
the DPW. The report captures an example of discussions at project
progress meetings indicating that these items were not regarded as
security items, stating that: "Mr Makhanya was also requested to
discuss the issue of the fire-pool with the President " (emphasis added,).
It was recorded in the minutes of the meeting that: "Mr Makhanya said
that the pool has been placed on hold because of the pool bearing a
private costing which the principal (the President) did not accommodate
for. " (emphasis added)

2. Regarding the Visitors' Centre: There is currently an empty building
belonging to the Zuma family that was used by the SAPS at the
beginning, which could have been used for the purpose. The media
made an issue of a tuck shop, but as the original tuck shop building
exists, and the new one is part of a building housing a legitimate and
listed security measure, I found no basis for rejecting the arguments for
the tuck shop as a discretional security measure.

3. On the state leased land outside the private residence: The private
health clinic, helipads and staff homes address a real need. However I
found no reason why these were located near the private residence
rather than at a central place that could benefit the entire impoverished
Nkandla community. The government submission makes a point of
highlighting the inhospitable terrain of Nkandla coupled with, at the time,
a lack of infrastructure such as roads, and properly resourced health

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facilities and police stations. General Ramlakan's submission that there
were no such central places is contradicted by evidence. For example,
a helipad near a rural hospital or police station could offer enormous
relief to this remote community. The building of the police staff quarters
at a local police station would have left a legacy for the community.
General Ramlakan alluded to the George airport as having been built
within a stone's throw of the then President Botha's private residence in
Wilderness. Firstly that airport is 23km from the said private residence,
and secondly, it supports the point about catering for the needs of the
caretakers in a manner that takes into account that public resources
should be primarily deployed to meet public needs. Also of concern is
the fact that the amounts involved in implementing these measures,
particularly the SAPS ones, is obscenely excessive. I could not find any
authority or legitimate reason for classifying the relocation of the
households at state expense, as a security measure as envisaged in
any of the authorizing security instruments. Apart from this not
appearing in the Minimum Physical Security Standards, such relocation
was not recommended in the Security Evaluation Reports. Furthermore,
no evidence was provided indicating that such relocation at state
expense was the only option for addressing the meandering fence.

(10) The Ministers of Public Works' communication with Parliament, the
nation and, possibly, the President was riddled with inaccuracies and
inconsistencies, particularly regarding the regulatory framework
employed to justify state expenditure on the upgrades at the President's
private residence, the nature of the upgrades and the extent to which
the President and his family benefited from relevant installations. This
has grossly undermined trust in government.

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(d) Regarding the allegation that the expenditure incurred by the state was

excessive or amounted to opulence at a grand scale:

(1) The cost analysis shows that the Nkandla Project started from humble
beginnings, but soon escalated by more than two hundred per cent
(200%) within a year. It is also clear that the uncontrollable escalation
took place once the decision-making powers shifted towards Mr
Makhanya as the Principal Agent.

(2) Minutes of project progress meetings ascribe the uncontrolled
escalation that occurred principally to the fact that there never was
demand management or a point at which the process owners
determined and capped the project scope and price.

(3) Mr Rindel's evidence indicates that a decision was made by the
Nkandla Project Team and the DPW to divide the project into three
phases and the documents show that the entire project was not costed
up front as required under both the Cabinet Policy and the National Key
Points Act. The evidence also shows that the cost ballooned
exponentially over time and so did the scale of the Nkandla Project.

(4) I could find no indication from the evidence that the ever escalating cost
and lack of planning of the project were ever attended to as serious
issues during the implementation thereof. Ms Pasely's evidence
confirms this.

(5) As the designs of Phases 1 and 2 continued, based on the
requirements of the SAPS and the DOD and the inputs of the Project
Team and professional consultants, the estimated cost of the project
increased, exponentially.

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(6) From the moment the professional quantity surveyors appointed for the
Nkandla Project by the DPW, (the same consultants as appointed by
the President) concluded from their initial assessment that the full scope
of the security requirements of the SAPS and the DOD was not properly
considered by the DPW and that the cost estimate of R27 million, as
determined by the Department, was very conservative, there were new
items and instant price escalation at virtually every project progress
meeting. The industry term for this phenomenon is "scope creep".

(7) As shown earlier, there, was massive scope creep. An example in this
regard is the Safe Haven which was initially conceived with a specific
location at the estimated cost of about half a million (R0.5 million). As
soon as Mr Makhanya got involved and convinced Brigadier Adendorff
the location was changed resulting in an initial estimate of R8 million
and the subsequent guzzling of about R19 million at the time of
concluding the investigation.

(8) By the time of finalizing the investigation, the total actual expenditure
had increased from the initially estimated R27 million to R215 million
despite the fact that the project remains incomplete, with the current
conservative estimation of the final cost being R246 million, excluding
lifetime maintenance costs.

(9) Worth noting is the fact that the money guzzlers are not items listed in
the standard setting instruments for security. The measures inside the
patch of land belonging to the Zuma family that seem to have escalated
the costs include the relocated safe haven, security fencing covering a
broader perimeter than President Zuma's original patch of land, the
swimming pool, amphitheatre, sophisticated cattle kraal boasting a

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culvert and chicken run, and the Visitors' Centre. Measures located
outside the Zuma patch of land and within land leased by the state for
additional infrastructures and support staff as part of the President's
security, health services inclusive of a clinic, helipads, paved streets,
bachelor rondavels for staff and rondavels for the relocated neighbours.

(10) All measures, whether in the inner perimeter fence (land leased by the
Zuma family from the Ingonyama Trust) or in the outer perimeter (state
occupied land) have been implemented principally for the purpose of
providing security for the President. I was not convinced by General
Ramlakan's argument that this is not the case. If it wasn't for the
decision to extend privileges to cover the President when at his private
residence, none of the costs incurred in respect of the infrastructure at
his door step, would have been incurred by the state. The only
difference between the inner and outer perimeter is the fact that
measures in the inner perimeter become the President's property
whereas those on state land remain public property when no longer
needed for the President's security.

(11) The contention by the representatives of organs of state involved that
the bulk of the money went towards measures in the outer perimeter,
accordingly, does not mitigate or change the fact that all expenditure
was incurred in the name of security, providing health services and
related privileges to the President in relation to his private residence. It
must be borne in mind that no clinic would have been built at a private
homestead if it was not passed as a security feature for the President.
The same applies to the helipads, massive paving, houses for members
of SAPS and others as well as the payment of relocation costs for the
moved households.

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(12) With all the above in mind, coupled with the fact that no evidence was
provided or found indicating that any effort was made to find more
economic alternatives, how do we answer the questions raised by the
first complainant regarding extreme opulence in the face of a state that
is struggling to meet the basic needs of people, including those in the
backyard of the homestead in question?

(13) The investigation revealed that seven teams of professional consultants
were involved in the Nkandla Project and were paid a total of R50 352
842 for Phases 1 and 2 alone. It is worth noting that the relocation of
two households cost R4.2 million whilst the relocation of 1.5 households
cost R3.7 million.

(14) The records of the DPW indicate that by the time that the investigation
was concluded the total expenditure of the project for the DPW
amounted to R 215 444 415. The estimated cost of Phase 3 of the
project that has not been implemented is R 31 186 887, which would
bring the total estimated cost of the project to R 246 631 303.

(15) Some of the actual expenditure at the conclusion of the investigation on
the Nkandla Project can be broken down as follows:

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Safe Haven, Corridor Link, Walkway Above & Exit Portion

R 19,598,804.10

20 Residential Staff Houses (40 units) and Laundry Facility

R 17,466,309.67

Relocation of 1,5 Households - Moneymine 310 CC*

R 4,223,506.68

Relocation of 2 Households - Bonelena Construction

R 3,698,010.76

Clinic and SAPS Garage

R 11,900,233.76

Visitors Centre & Control Room #

R 6,720,852.95

Tuck-shop, Transformer & LV Room, Genset Room & Refuse Area

R 956,381.16

Guard House 1

R 1,205,827.49

Guard House 2 & 3

R 1,367,770.87

Crew Pavilion

R 997,831.00

Sewer Pump Station

R 807,782.16

Fire Pool and Parking

R 2,819,051.66

Sewer Treatment Plant

R 1,030,673.68

Booster Pump Station and Steel Reservoir Tank

R 571,278.25

New Residences: Security Measures & Air-conditioning

R 5,038,036.33

General SiteworksfWote 1)

R 67,964,858.55

SUB-TOTAL CONSTRUCTION COST

R 146,367,209.07

ADD: CONTRACT PRICE ADJUSTMENT PROVISION

R 1,231,109.08

LESS: PENALTIES IMPOSED FOR LATE COMPLETION OF THE CONTRACT

-R 2,781,149.08

SUB-TOTAL NET ESCALATED CONSTRUCTION COST

R 144,817,169.07

VAT (14%)

R 20,274,403.67

R 165,091,572.74

Figure A: Summary of the works implemented by the DPW

* The reference to 1.5 households here relates to the fact that not all of the buildings of the one
household were replaced as it already had an existing building at the place of relocation.

# The control room referred to here is the lower part of the building. The lounge is on the first floor of the
Visitors' Centre.

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twiiA'j TET3

CA du Toit

Security Consultants

R 2,691,231.49

Ibhongo Consulting CC

Civil & Structural Engineers

R 6,006,457.36

Igoda Projects (Pty) Ltd

Electrical Engineers

R 2,503,732.89

R&G Consultants

Quantity Surveyors

R 13,794,957.70

Minenhle Makhanya Architects

Architects, Principal Agent

R 16,587,537.71

Mustapha & Cachalia CC

Mechanical Engineers

R 3,676,448.05

Ramcon

Project Management
Project Managers

R 5,092,477.73

Figure B: List of Consultants and total payments made to each

(16) The security installations and amounts involved in security measures
previously implemented at private residences of Presidents, Deputy
Presidents, former Presidents and former Deputy Presidents appear to
back the conclusion that the intention of the crafters of the authorizing
instruments for security measures envisaged items that fall in the
ordinary definition of security installations and did not anticipate grand
scale constructions.

(17) In this regard, it is worth noting that at R215 million and still rising, the
cost of security installations at President Zuma's private residence far
exceeds similar expenditure in respect of all his recent predecessors.
The difference is acute, even if an allowance is made for the rural
nature of the Nkandla area and the size of President Zuma's household.

(18) According to information submitted by the DPW and DOD:

1. R20 101 (equating to an estimated R173 338 in 2013 financial terms)
was spent on former President Botha's private residence;

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2. R42 196 (R236 484) was spent on former President De Klerk's private
residence;

3. Less than R32 million was spent at former President Mandela's two
private residences, one of which is located in a rural area in the Eastern
Cape. I was referred to the fact that the DOD had placed a field hospital
at his rural home, at the cost of about R17 million. However, this is a
mobile structure that will revert back to the state and not a permanent
fixture, as is the case of the Military Clinic constructed at President
Zuma's private residence; and

4. R8 113 703 (R12 483 938) in the case of former President Mbeki's
private residence.

(19) Judging by these amounts, it is clear that the installations envisaged in
the name of security are items you are likely to find at a security shop or
company regulated by the security industry regulator, PRISA and not
the kind of constructions done work done under the rubric of human
settlements or the built industry.

office bearers, public officials and other actors:

(1) This part is specifically dealt with under findings of maladministration.
What needs to be said here is that various state actors had different
roles they were required to play, as stipulated by law.

(2) Most of the roles are prescribed under the Cabinet Policy of 2003, the
National Key Points Act 102 of 1980 and procurement prescripts, which
primarily comprise the Public Finance Management Act 1 of 1999,

(e)

Regarding conduct allegedly amounting to maladministration by public

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Preferential Procurement Policy Framework Act 5 of 2000, Treasury
Regulations, Treasury Directives and Practice Notes and related
prescripts and departmental policies and guidelines.

(3) The actors in question were also required to refrain from prohibited
practices, such as acts prohibited under the Executive Ethics Code, the
Public Service Code and sections 96 and 195 of the Constitution.

(4) The documents elicited, particularly in the form of memoranda, letters
and minutes show that virtually all the parties involved either failed to do
what they were required to do or did what they were not supposed to
do. I deal with the accountability of relevant state actors in the findings.

(5) Worth noting is the fact that no evidence indicates that any of the state
actors took prudent action when the Mail & Guardian Newspaper blew
the whistle on the runaway cost of the Nkandla Project in 2009, alleging
then that an exorbitant amount of R65 million had been spent. It is my
considered view that the President, Minister and Deputy Minister of
Public Works and senior officials in the SAPS, DPW and DOD involved
should have immediately assessed the project with a view to verifying
the veracity of the allegations and if confirmed, arrest the escalating
costs. I am also quite certain that had such prudent action been taken,
we would not be speaking of R215 million while still counting today.

(6) Considering that the Principal Agent, Mr Makhanya and one of the
contractors, Moneymine, billed the President or his private works and
the state for the Nkandla Project, it is difficult to understand how they
could have charged the amounts in respect if the latter when some of
the works are fairly similar or substantially less involved than the
President's dwellings. More perplexing is the fact that many of the

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measures funded by the state were less extensive than the President's
private works. An example in this regard is the relocation of two families
at R2.1 million each.

security measures and the construction of buildings and other items at
the President's private residence and was such authority violated or
exceeded?

(1) The authority for implementing security measures at the private
residence of the President is primarily conferred by the Cabinet Policy
of 2003. In view of the Declaration of the residence as a National Key
Point during the implementation of the security measures, the National
Key Points Act, constitutes part of the legal framework conferring
authority to upgrade security at a private residence. However, the
implementation of the security measures failed to comply with the
parameters set out in the laws in question for the proper exercise of
such authority.

(2) The key violation in this regard is the failure to follow the processes
outlined in the Cabinet Policy and the deviation from the 16 security
measures that were recommended in the Second Security Evaluation
by SAPS. This constitutes improper conduct and maladministration.

(3) With the National Key Points Act having been inexplicably dragged in
halfway through the implementation of the Nkandla Project, its
provisions had to be complied with. This did not happen. Neither was
there compliance with the contents of the declaration of the Nkandla

(xi)

I make the following findings:

(a)

Was there any legal authority for the installation and implementation of

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Residence as a National Key Point, as signed by the Minister of Police
on 08 April 2010.

(4) In relation to installations at the request of the Surgeon General on
behalf of the DOD and SAMHS, there appears to be no instrument
specifically authorizing the construction of brick and mortar installations
at or for a private household. The installations were justified on generic
military doctrines aimed at installations built in pursuit of public
services and the general power given to the SAMHS to provide health
services to the President Deputy President, Minister and Deputy
Minister of Defence and, at the request of the Minister of International
Relations and Cooperation, to foreign dignitaries.

(b) Was the conduct of relevant authorities in respect of the procurement
of goods services relating to the Nkandla Project improper and in
violation of relevant prescripts?

(1) The organs of state involved in the Nkandla Project failed dismally to
follow Supply Chain Management prescripts, such as section 217 of the
Constitution, PFMA, Treasury Regulations the DPW Supply Chain
Management policy, key omissions including: the absence of demand
management; improper delegations; failure to procure services and
goods costing above R500 000 through a competitive tender process;
failure to conduct due diligence leading to the engagement of service
providers such as the Principal Agent without the necessary
qualifications or capacity for security measures; failure to ensure
security clearance for service providers, and allowing "scope creep"
leading to exponential scope and cost escalations.

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(2) In addition, the DPW failed to comply with the provisions of GIAMA,
which specifically require a proper asset management plan in respect of
the immovable assets of the state.

(3) The conduct of all organs of state involved in managing the Nkandla
Project, particularly officials from the DPW, who unduly failed to comply
with Supply Chain Management prescripts was unlawful and constitutes
improper conduct and maladministration. The DOD and SAPS officials
failed to comply with Treasury Regulation 16A.3.2 imposing the
responsibility for demand management on client departments, which
include ensuring cost effective measures and budgeting, appropriately
for such.

residence, go beyond what was required for his security?

(1) A number of the measures, including buildings and other items
constructed and installed by the DPW at the President's private
residence went beyond what was reasonably required for his security.
Some of these measures can be legitimately classified as unlawful and
the acts involved constitute improper conduct and maladministration.

(2) Measures that should never have been implemented as they are neither
provided for in the regulatory instruments, particularly the Cabinet Policy
of 2003, the Minimum Physical Security Standards and the SAPS
Security Evaluation Reports, nor reasonable, as the most cost effective
to meet incidental security needs, include the construction inside the
President's residence of a Visitors' Centre, an expensive cattle kraal
with a culvert and chicken run, a swimming pool, an amphitheatre,
marquee area, some of the extensive paving and the relocation of

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neighbours who used to form part of the original homestead, at an
enormous cost to the state. The relocation was unlawful as it did not
comply with section 237 of the Constitution. The implementation of
these installations involved unlawful action and constitutes improper
conduct and maladministration.

(3) Measures that are not expressly provided for, but could have been
discretionally implemented in a manner that benefits the broader
community, include helipads and a private clinic, whose role could have
been fulfilled by a mobile clinic and/or beefed up capacity at the local
medical facilities. The measures also include the construction, within the
state occupied land, of permanent, expensive but one roomed SAPS
staff quarters, which could have been located at a centralized police
station. The failure to explore more economic and community inclusive
options to accommodate the discretional security related needs,
constitutes improper conduct and maladministration.

amount to opulence at a grand scale, as alleged?

(1 ) The expenditure incurred by the state in respect of the measures taken,
including buildings and other items constructed or installed by the DPW
at the request of the SAPS and DOD, many of which went beyond what
was reasonably required for the President's security, was
unconscionable, excessive, and caused a misappropriation of public
funds. The failure to spend state funds prudently is a contravention of
section 195 (1)(b) of the Constitution and section of the Public Finance
Management Act. The acts and omissions involved are, accordingly,
unlawful and constitute improper conduct and maladministration.

(d)

Was the expenditure incurred by the state in this regard excessive or

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(2) The first Complainant's allegation that the expenditure constitutes
opulence at a grand scale is substantiated. The acts and omissions that
allowed the excessive expenditure due to non-security items and failure
to arrest the wild cost escalation, especially after the story broke in the
media in December 2009, constitute improper conduct and
maladministration.

(e) Did the President's family and/or relatives improperly benefit from

installations implemented by the state at his private residence?

(1) The allegation that President Zuma's brothers improperly benefitted
from the measures implemented is not substantiated. I could find no
evidence supporting the allegations that the President's brothers
benefitted from the procurement of electrical items for the
implementation of the Nkandla Project.

(2) The allegation that the excessive expenditure added substantial value
to the President's private property at the expense of the state is
substantiated. The excessive and improper manner in which the
Nkandla Project was implemented resulted in substantial value being
unduly added to the President's private property. The acts and
omissions that allowed this to happen constitute unlawful and conduct
improper conduct and maladministration.

(3) The original allegation that President Zuma's immediate family
members also improperly benefitted from the measures implemented is
substantiated. President Zuma improperly benefited from the measures
implemented in the name of security which include none security
comforts the Visitors' Centre, such as the swimming pool, amphitheatre,
and the cattle kraal with culvert and chicken run. The private medical

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clinic at the family's doorstep will also benefit the family forever. The
acts and omissions that allowed this to happen constitute unlawful and
improper conduct and maladministration.

(4) I do not find the relocation of the tuck shop as a benefit as the business
was moved at the instance of the state to a building that might even be
inconvenient to the owner.

(5) The conduct of the DPW leading to the failure to resolve the issue of
items earmarked for the owner's cost transparently, including the failure
to report back on the swimming pool question after the 1 1 May 201 1
meeting and the disappearance of the letter proposing an
apportionment of costs, constitutes improper conduct and
maladministration

(f) Was there any maladministration by public office bearers, officials and

other actors involved in the project?

(1) Public Office Bearers:

1 . All the Ministers of Public Works provided incorrect information on the
legal authority for and the extent of the works at the President's private
residence.

2. The Minister of Police failed to properly apply his mind when signing the
Declaration of President Zuma's private residence as a National Key
Point directing the President to implement security measures at own
cost or to properly modify the Declaration. This failure constitutes
improper conduct and maladministration.

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3. The former Minister of Public Works, Mr G Doidge and the Minister of
Police could have provided better executive leadership, especially with
regard to speedily accessing the extent and cost of the Nkandla Project,
particularly when the media broke the story in 2009 and taking decisive
measures to curb excessive expenditure. Their failure in this regard
constitutes improper conduct and maladministration

(2) Officials of the DPW:

1. The DPW officials failed to acquaint themselves with the authorizing
instruments relating to the implementation of the Nkandla Project. They
failed to apply their minds and adhere to the supply chain management
policy framework in respect of the procurement of goods and services
for the Nkandla Project. These failures constitute improper conduct and
maladministration.

2. Messrs Malebye and Vukela, the Acting Directors-General of the DPW
failed as the accounting officers of the Department at the material times
to comply with and/or ensure compliance with the provisions of sections
195(1)(b) and 217 of the Constitution, the PFMA, Treasury Regulations
and prescripts and the DPW Supply Chain Management Policy in
respect of the Nkandla Project was improper and constitutes
maladministration.

3. Ms G Pasely, the Chief Quantity Surveyor showed exemplary conduct
by raising her concerns about the excessive escalation in the cost of the
Project. It is unfortunate that her concerns in this regard were not taken
seriously.

(3) Officials of the SAPS:

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1. The SAPS officials failed to acquaint themselves with the authorizing
instruments relating to the implementation of the Nkandla Project. They
failed to apply their minds and adhere to the supply chain management
policy framework in respect of the procurement of goods and services
for the Nkandla Project. These failures constitute improper conduct and
maladministration.

2. Brigadier Adendorff, the Head of Security Advisory Service failed to
comply with and or ensure compliance with the provisions of sections
195(1)(b) and 217 of the Constitution, the PFMA, Treasury Regulations
and prescripts in respect of the area of her responsibility relating to the
Nkandla Project was improper and constitutes maladministration

(4) Officials of the POD

1. The DOD officials failed to acquaint themselves with the authorizing
instruments relating to the implementation of the Nkandla Project. They
failed to apply their minds and adhere to the supply chain management
policy framework in respect of the procurement of goods and services
for the Nkandla Project. These failures constitute improper conduct and
maladministration.

2. Lt Gen Ramlakan, the former Surgeon-General, failed to comply with
and or ensure compliance with the provisions of sections 1 95(1 )(b) and
217 of the Constitution, the PFMA, Treasury Regulations and prescripts
in respect of his area of responsibility relating to the Nkandla Project
was improper and constitutes maladministration.

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(5) The Contractors

1. Mr Makhanya's assumed of multiple and conflicting roles as Principal
Agent, the President's architect and procurer of some of the
subcontractors which placed him in a position where the advice he gave
was tainted by conflict of interest and not in the public interest, which
led to uncontrolled scope creep, cost escalation and poor performance
by some of the contractors.

(g) Was there any political interference in the implementation of this
project?

(1) The former Minister of Public Works, Mr G Doidge, and Deputy Minister
Bogopane-Zulu were at some stage involved in the implementation of
the Nkandla Project. Their involvement, albeit for a short period of time,
appears to have created an atmosphere that was perceived as political
interference or pressure, although the evidence does not show any
such intent on their part.

(2) The Task Team Report also indicated that officials were uneasy with the
operational involvement of politicians in the Nkandla Project.

(3) Their involvement at trench level, including the Deputy Minister making
suggestions on how to meet perceived security needs, was ill advised
although well intended in the light of failures in meeting the project
timelines. While I would discourage such acts in similar future
circumstances, I am unable to find their attempts at problem solving as
constituting improper conduct or maladministration.

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(h) Were funds transferred from other much needed DPW projects to fund

this project?

(1) Funds were reallocated from the Inner City Regeneration and the
Dolomite Risk Management Programmes of the DPW. Due to a lack of
proper demand management and planning service delivery
programmes of the DPW were negatively affected. This was in violation
of section 237 of the Constitution and the Batho Pele White Paper and
accordingly constitutes improper conduct and maladministration.

(i) Is the President liable for some of the cost incurred?

(1) If a strict legal approach were to be adopted and the National Key
Points Act was complied with, President Zuma would be held to the
provisions of the Declaration of the Minister of Police issued on 08 April
2010, which informs him of the decision to declare his private Nkandla
residence a National Key Points and directs him to secure the National
Key Point at his own cost.

(2) However, that approach would not meet the dictates of fairness as the
Presidents, Deputy Presidents, former Presidents and former Deputy
Presidents are entitled, under the Cabinet Policy of 2003, to reasonable
security upgrades, at their request or that of their office at state
expense. Even on the understanding that some of the measures were
unauthorized and transcended security measures as envisaged in the
regulatory instruments and security evaluation findings, the
questionable measures implemented exceed the financial means of an
ordinary person. It is further clear from all communication by President
Zuma that he was never familiarized with the provisions of the National
Key Points Act and, specifically, the import of the declaration. The

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declaration itself was apparently delivered to his office in April 2011, a
year after it was made and more than two years after the security
installations had commenced.

(3) The DPW mismanaged the process initiated with a view to determining
the cost to be paid by President Zuma in respect of security measures
installed at and in support of his private residence at Nkandla and which
was initially estimated at more than R10 million, leading to a situation
where to date, there is no clarity on that matter. This constitutes
improper conduct and maladministration.

(4) It is my considered view that as the President tacitly accepted the
implementation of all measures at his residence and has unduly
benefited from the enormous capital investment from the non-security
installations at his private residence, a reasonable part of the
expenditure towards the installations that were not identified as security
measures in the list compiled by security experts in pursuit of the
security evaluation, should be borne by him and his family.

(5) It is also my considered view that the amount in question should be
based on the cost of the installation of some or all the items that can't
be conscionably accepted as security measures. These include the
Visitors' Centre, cattle kraal and chicken run, swimming pool and
amphitheatre. The President and his legal advisers, did not dispute this
in their response to the Provisional Report. The President did not
dispute during the investigation that he told me on 1 1 August 2013 that
he requested the building of a larger kraal, and that he was willing to
reimburse the state for the cost thereof.

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(j) Were there ethical violations on the part of the President in respect of

the project?

(1) President Zuma told Parliament that his family had built its own houses
and the state had not built any for them or benefited them. This was not
true. It is common cause that in the name of security, government built
for the President and his family in his private a Visitors' Centre, cattle
kraal and chicken run, swimming pool and amphitheatre among others.
The President and his family clearly benefitted from this.

(2) I have accepted the evidence that he addressed Parliament in good
faith and was not thinking about the Visitors' Centre, but his family
dwellings when he made the statement. While his conduct could
accordingly be legitimately construed as misleading Parliament, it
appears to have been a bona fide mistake and I am accordingly unable
to find that his conduct was in violation of paragraph 2 of the Executive
Ethics Code. His statement is also consistent with those made by the
Ministers of Public Works throughout the public outcry over the Nkandla
expenditure. I am accordingly unable to find that his conduct was in
violation of paragraph 2 of the Executive Ethics Code.

(3) Regarding President Zuma's conduct in respect of the use of state
funds in the Nkandla Project, on the only evidence currently available,
the President failed to apply his mind to the contents of the Declaration
of his private residence as a National Key Point and specifically failed to
implement security measures at own cost as directed by it or to
approach the Minister of Police for a variation of the Declaration.

(4) It is my considered view that the President, as the head of South Africa
Incorporated, was wearing two hats, that of the ultimate guardian of the

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resources of the people of South Africa and that of being a beneficiary
of public privileges of some of the guardians of public power and state
resources, but failed to discharge his responsibilities in terms of the
latter. I believe the President should have ideally asked questions
regarding the scale, cost and affordability of the Nkandla Project. He
may have also benchmarked with some of his colleagues. He also may
have asked whose idea were some of these measures and viewed
them with circumspection, given Mr Makhanya's non-security
background and the potential of misguided belief that his main role was
to please the President as his client and benefactor.

(5) It is also not unreasonable to expect that when news broke in
December 2009 of alleged exorbitant amounts, at the time R65 million
on questioned security installations at his private residence, the dictates
of sections 96 and 237 of the Constitution and the Executive Ethics
Code required of President Zuma to take reasonable steps to order an
immediate inquiry into the situation and immediate correction of any
irregularities and excesses.

(6) His failure to act in protection of state resources constitutes a violation
of paragraph 2 of the Executive Ethics Code and accordingly, amounts
to conduct that is inconsistent with his office as a member of Cabinet,
as contemplated by section 96 of the Constitution.

(7) Regarding the allegation that the President may have misled Parliament
and accordingly violated the Executive Ethics Code when he
announced that the renovations at his private residence were financed
through a bank mortgage bond, I am unable to make a finding. Although
having established through the Register of Financial Interests that the
President has declared a mortgage bond in respect of his private

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residence at Nkandla since 2009, I am not able to establish if costs
relating to his private renovations were separated from those of the
state in the light of using the same contractors around the same time
and the evidence of one invoice that had conflated the costs although
with no proof of payment.

(1 ) The occupation by the state of the land adjacent to that occupied by the
President, and where security and other measures were constructed
and installed by the DPW is unlawful and improper as it violates the
provisions and requirements of the KwaZulu-Natal Ingonyama Trust
Act, 1994 that requires a proper lease agreement. It also constitutes
maladministration.

(2) The conduct of some of the role players unduly delayed the
investigation.

(1) The anomalies in the Nkandla Project point to the existence of systemic
policy gaps and administrative deficiencies in the regulatory framework
used as authority for implementing security measures at the private
residences of ones of Presidents, Deputy Presidents, former Presidents
and former Deputy Presidents, key among these being the absence of a
cap and an integrated instrument such as the Ministerial Handbook,
where all permissible measures can be found.

(2) In view of the fact that the Cabinet Policy of 2003 applies equally to all
Presidents, Deputy Presidents, former Presidents and former Deputy

(k)

Other Findings of Maladministration

(I)

Systemic Deficiencies Observed During the Investigation

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Presidents, there is real risk of a repeat of the Nkandla excesses in
respect of any of the four covered categories of public office bearers in
the future. As the policy applies to all residences of incumbents in any
of the four categories, the risk of unbridled expenditure in the future is
very real and needs immediate curbing.

(3) DOD deficiencies, including no instruments for according and regulating
the exercise of discretion and concentration of power on a single
individual with no accountability arrangements, emphasized the need
for a proper policy regime regulating security measures at the private
residences of the President, Deputy President, Minister and Deputy
Minister of Defence.

(4) Need for a clear demarcation of the roles of the SAPS, DPW and DOD
in respect of such projects.

(m) The Impact of the Nkandla Project

(1) A number of the items installed by the DPW, such as the safe haven,
swimming pool, paved roads and walkways as well as water and
electricity supply, will require lifetime maintenance at cost to the state.
Some maintenance costs may transcend the President's lifetime.

(2) The military clinic also requires maintenance, supplies and permanent
human resources as long as it exists, which may be beyond the
President's lifetime.

(3) The future of the buildings constructed at the request of the SAPS also
need to be determined.

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(xii)

Appropriate remedial action to be taken on my findings of maladministration

and as envisaged by section 182(1) of the Constitution is the following:

(1 ) Take steps, with the assistance of the National Treasury and the SAPS,
to determine the reasonable cost of the measures implemented by the
DPW at his private residence that do not relate to security, and which
include Visitors' Centre, the amphitheatre, the cattle kraal and chicken
run and the swimming pool.

(2) Pay a reasonable percentage of the cost of the measures as
determined with the assistance of National Treasury, also considering
the DPW apportionment document.

(3) Reprimand the Ministers involved for the appalling manner in which the
Nkandla Project was handled and state funds were abused.

(4) Report to the National Assembly on his comments and actions on this
report within 14 days.

(1) Update the Cabinet Policy of 2003 to provide for a more detailed
regime;

(2) Assist Cabinet to set clear standards on the security measures that can
be taken, the reasonable cost that can be incurred by the state and the
conditions subject to which current and former Presidents and Deputy
Presidents would qualify for such measures;

(a)

The President is to:

(b)

The Secretary to the Cabinet to take urgent steps to:

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JCjLIC F>EO>TE<:.TOk

(3) Take periodic measures to familiarize all members of the Cabinet with
the parameters for enjoying executive benefits and the responsibilities
they have to ensure that officials do not give them benefits transcending
what they are entitled to under the law or policies; and

(4) Ensure that the Department of Defence creates Standard Operating
Procedures regulating the implementation of the benefits extended to
Presidents, Deputy Presidents, the Minister and Deputy Minister of
Defence and foreign dignitaries (at the request of the Minister of
International Relations and Cooperation), which is aligned with the
principles of equality, proportionality, reasonableness and justifiability,
within 6 months from the issuing of this report.

(1) Take urgent steps to expedite the review of the National Key Points Act
to clarify its applicability to presidential security privileges and align it
with the Constitution and post-apartheid developments;

(2) Ensure that no further security measures are installed at the President's
private residence at Nkandla, except those determined to be absolutely
necessary for the functionality of already installed measures; and

(3) Ensure that the Nkandla Project does not set a precedent for measures
implemented in respect of any future President, Former President,
Deputy President and Former Deputy President

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(d)

The National Commissioner of the SAPS to:

(1) Identify officials that were and may still be involved in the Nkandla
Project and implement measures to identify why prescripts were not
complied with and on the basis thereof decide if disciplinary action
should be taken; and

(2) Assist the Minister of Police in familiarizing himself with the contents of
and his responsibilities under the National Key Points Act and the
Cabinet Policy of 2003 and ensure that in future officials assisting
Ministers to take action under any law include, in each relevant
submission, a copy of the legal instrument in question and an outline of
all steps required of the Minister.

(2) With the assistance of the National Treasury, obtain advice from an
independent and reputable security consultant on the security measures
that were necessary for the protection of the President and estimated
legitimate costs thereof. On the basis of this information, the DPW to
determine the extent of the over expenditure on the Nkandla project and
to obtain legal advice on the recovery thereof;

(3) With the assistance of the National Treasury, determine the extent to
which the SAPS and the DOD should be held liable for the expenditure

(e)

The Director-General of the DPW to take urgent steps to:

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incurred in the implementation of the Nkandla Project and to recover the
amounts accordingly;

(4) Take urgent steps to enter into a lease agreement with the KwaZulu-
Natal Ingonyama Trust Board in respect of the property occupied by the
state adjacent to the President's private residence;

(5) Take urgent steps to relocate the park homes to another organ of state
that requires temporary accommodation;

(6) Review the delegation of authority to Regional Offices of the
Department;

(7) Ensure that all DPW staff involved in supply chain management is
properly trained on deviations from the normal prescribed procurement
processes;

(8) Ensure that all DPW staff involved in the implementation and execution
of projects are properly trained and capacitated to manage projects
assigned to them;

(9) Comply with the provisions of GIAMA in respect of the assets acquired
as a result of the Nkandla Project; and

(10) Develop a policy for the implementation of security measures at the
private residences of the President, Deputy President and former
Presidents and Deputy Presidents.

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(xiii)
(a)

(b)

(c)

(d)

The Secretary for Defence, to take urgent steps to:

(1) Consolidate prescripts relating to the medical, transport and evacuation
of Presidents, Deputy Presidents, former Presidents and former Deputy
Presidents;

(2) Determine the role played by DOD Officials, and in particular the
SAMHS, in the Nkandla Project to ascertain if it was in line with their
remit and if legal authority boundaries and procedures were complied
with; and

(3) Ensure certainty and accountability in respect of the future
implementation of measures relating to (1) above.

In order to monitor and ensure the implementation of the remedial action
indicated above, the following steps must be taken:

When the President submits this report and his intentions regarding the
findings and remedial action, within 14 days of its receipt, the Director
General in the Presidency should notify my office and Cabinet.

Accounting Officers of all organs of state required to take remedial action, are
to provide implementation plans to the Public Protector's office not later than
01 May 2014.

Status reports on implementation are to be submitted by the affected
accounting officers within three months and final reports on action taken to
be submitted within 6 months of the issuing of this report.

Public Office bearers of affected organs of state are to ensure compliance.

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"Let it never be said by future generations that indifference, cynicism or selfishness
made us fail to live up to the ideals of humanism which the Nobel Peace Prize

encapsulates. "
President of South Africa, Nelson Rholihlahla Mandela

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LIST OF ACRONYMS

AGS A

Auditor-General South Africa

ANC

African National Congress

BAC

Bid Adjudication Committee

Bonelena

Bonelena Construction Enterprise and
Projects CC

CIDB

Construction Industry Development Board

Director-General

Directive

Directive: Acquisition and Disposal
Management

DOD

Department of Defence

DPW

Department of Public Works

GIAMA

Government Immovable Asset
Management Act, 2007

Head Office

IDC

Industrial Development Corporation

JCPS

Justice, Crime Prevention and Security

KAM

Key Account Management

MISS

Minimum Information Security Standards

Moneymine

Moneymine 310 CC

MTEF

Medium Term Expenditure Framework

Member of Parliament

NIA

National Intelligence Agency

NKP

National Key Point

PFMA

Public Finance Management Act, 1999

Procurement Instruction

Project Manager

PMBC

Planned Maintenance Budget Committee

PMTE

Property Management Trading Entity

PPM

Portfolio Performance and Monitoring

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JM.K PftiOTECTOP?
SC^UTH flfPKU

Quantity Surveyor

RBAC

Regional Bid Adjudication Committee

RDP

Reconstruction and Development
Programme

SANDF

South African National Defence Force

SAPS

South African Police Service

SCM

Supply Chain Management

SAMHS

South African Medical Health Services

SNBAC

Special National Bid Adjudication
Committee

SIU

Special Investigating Unit

SSA

State Security Agency

Voltex

Voltex (Pty) Ltd

WCS

Work Control System

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LIST OF KEY ROLE PLAYERS

NAME

POSITION

His Excsllencv J Zuma

The President of the Republic of South
Africa

Mr J Radebe MP

The Minister of Justice and Constitutional
Development

Ms N Mapisa-Nqakula MP

The Minister of Defence and Military
Veterans

Mr N Mthethwa MP

The Minister of Police

Mr T W Nxesi MP

The Minister of Public Works

Dr S Cwele MP

The Minister of State Security

Amb. G Doidge

A former Minister of Public Works

Ms G Mahlangu-Nkabinde

The former Minister of Public Works

Ms H Rnnnnanp-7iilu MP

ivio i i uuyuuui iu £— uiu ivii

The former Deputy Minister of Public
Works

Lt Gen V Ramlakan

The former Surgeon-General of the
SANDF

Dr C R Lubisi

The Director-General in the Presidency

Mr S Malebye

A former Acting Director-General of the
DPW

Mr S Vukela

A former Acting Director-General of the
DPW

Ms G Pasley

Chief Quantity Surveyor of the DPW

Mr K Khanyile

Former Regional Manager of the Durban
office of the DPW

Mr J Rindel

Project Manager of the Nkandla Project

Mr J P Crafford

Director: Architectural Services of the
DPW

Brigadier S J Adendorff

Head of Security Advisory Services of the
SAPS

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Architect and Principal Agent appointed

Mr M Makhanya

by the DPW. He was also appointed by

the President to design his private works

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1. INTRODUCTION

1.1. "Secure In Comfort" is my report as the Public Protector of the Republic of
South Africa on an investigation conducted into allegations of impropriety and
unethical conduct relating to the installation and implementation of security
measures at and in respect of the private residence of President J Zuma, at
Nkandla in the KwaZulu-Natal Province.

1.2. The investigation was conducted in terms of the provisions of section 182 of
the Constitution of the Republic of South Africa, 1996 (the Constitution) and
sections 6 and 7 of the Public Protector Act, 1994 (the Public Protector Act).
Part of the investigation was also conducted in terms of sections 3 and 4 of
the Executive Members' Ethics Act, 1998 (the Executive Members' Ethics
Act).

1 .3. The report is submitted to:

1.3.1. The President of the Republic of South Africa, His Excellency, Mr J G Zuma;
and

1.3.2. The Joint Chairpersons of the Parliamentary Joint Committee on Ethics and
Members Interests, the Honourable Prof B Turok, MP and Mr B Mashile, MP.

1 .4. The report will also be presented to:

1 .4.1 . The Minister of Police, the Honourable Mr N Mthethwa, MP;

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1 .4.2. The Minister of Defence and Military Veterans, the Honourable Ms N Mapisa-
Nqakula, MP;

1.4.3. The Deputy Minister of Women, Children and Persons with Disabilities, the
Honourable Ms H Bogopane-Zulu, MP, who was the Deputy Minister of
Public Works during certain times material to the investigation referred to in
this report;

1 .4.4. The South African High Commissioner to the Democratic Socialist Republic
of Sri Lanka, Mr G Doidge, who was the Minister of Public Works when the
project referred to in this report commenced;

1 .4.5. The Director-General in the Presidency and Secretary to the Cabinet, Dr R C
Lubisi;

1.4.6. The Director-General of the Department of Public Works (DPW), Mr M
Dlabantu;

1.4.7. The National Commissioner of the South African Police Service (SAPS),
General M V Phiyega;

1 .4.8. The former Acting Directors General of the DPW, Messrs. S Malebye and S
Vukela;

1.4.9. The Section Head: Security Advisory Service of the SAPS, Brigadier S J
Adendorff;

1.4.10. The former Regional Manager of the DPW Durban Regional Office, Mr K
Khanyile; and

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1 .4.1 1 . The DPW Project Manager, Mr J Rindel.
1 .5. Copies of the report will also be provided for noting to:

1 .5.1 . The Minister of Justice and Constitutional Development, the Honourable Mr J
Radebe, MP;

1.5.2. The Minister of Public Service and Administration, the Honourable Ms L
Sisulu, MP who was the Minister of Defence at certain times material to the
investigation referred to in this report;

1 .5.3. The Minister of Public Works, the Honourable Mr T Nxesi, MP;

1 .5.4. The Minister of State Security, the Honourable Dr S Cwele, MP;

1 .5.5. The South African Ambassador to the Republic of Angola, His Excellency, Mr
G Ngwenya, who was the Chief of the South African National Defence Force
(SANDF) at certain times material to the investigation referred to in this
report;

1 .5.6. The former National Commissioner of the SAPS, General B Cele; and

1.5.7. The complainants.
2. THE COMPLAINTS

2.1. The complaints were lodged between 13 December 2011 and 12 December
2012 the first complaint was lodged by a member of the public on 13

March 2014

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December 201 1 who expressed concern over and requested an investigation
to verify allegations of impropriety relating to state funded upgrades at
President Zuma's private residence, published by the Mail and Guardian on
11 November 2011, under the heading: "Bunker, bunker time: Zuma's lavish
Nkandla upgrade". According to this media report, the President's private
residence was being improved and upgraded at enormous state expense.
The improvements allegedly included a network of air conditioned living
quarters, a clinic, gymnasium, 20 houses for security guards, underground
parking, a helicopter pad, playground and a Visitors Centre.

2.2. I immediately informed the Presidency of the request for an investigation into
the matter and subsequently met with the Director-General of the Presidency,
Dr R C Lubisi, in January 2012. He advised on appropriate departments to
assist.

2.3. I also informed the President and Dr Lubisi in writing of the compliant in
letters addressed to them respectively, on 15 February 2012.

2.4. Allegations of impropriety and excessive public expenditure relating to
installation and implementation by the state of security measures at
President Zuma's private residence (hereafter referred to as the Nkandla
Project) subsequently appeared in the media on a regular basis.

2.5. On 30 September 2012, for example, the City Press published an extensive
article on the matter, alleging, inter alia, that the DPW had allocated funding
of more than R203 million to the project and that the development included
the construction of three sets of underground living quarters with 10 air
conditioned rooms, a clinic for the President and his family, 10 houses for
security personnel, a helipad and houses for members of the South African
Air Force and the SAPS.

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SOUTH flfPKU

2.6. The Honourable Ms L Mazibuko, MP of the Democratic Alliance lodged a
complaint based on this media article with my office on 30 September 2012,
as did three members of the public in October 2012 and one in November
2012.

2.7. In their letters of complaint, the complainants raised, inter alia, the following
concerns:

2.7.1 . "Like all South Africans I have recently read in the media the appalling story
of the sums of taxpayers' money being spent on the private residence of
President Jacob Zuma. This is opulence on a grand scale and as an honest,
loyal, taxpaying South African I need to understand how this is allowed to
happen. Strangely civil society is quiet. This is wrong and highlights the
complete disregard which this Government has for the citizens of this
country. Where is this money coming from and how has it been approved?"

2.7.2. "Whether any undue political influence was placed on the Department of
Public Works to allocate these funds;

Who issued the instruction for the allocation of these funds?

Whether these funds have been properly budgeted for;

Whether any funds have been transferred from other much needed projects
for this revamp to take place;

Whether the allocation of funds for what is essentially a private home - which
will not remain within the state's ownership - represents irregular
expenditure."

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2.7.3. "The Minister of Public Works has approved that highly debated,

refurbishment of the current president's private residence in Nkandla, and
she (sic) has indicated that this is in line with the Ministerial Handbook. This, I
will show, is in fact not true.

According to the handbook, 'Members are responsible for all costs related to
the procurement, upkeep and maintenance of private residences used for
official purposes' and furthermore The Minister of Public Works may approve
a State contribution of a non-recoverable maximum amount of R 100 000, or
the total cost of security measures not exceeding R100 000'.

As the house in Nkandla is privately owned, the President should only be
granted R100 000 for security measures, and not the allotted R203 million.
This contradicts the handbook, and so the upgrade should be deemed
unlawful, and I wish the Public Protector could investigate this, as the money
is well spent on other things in South Africa. "

2.7.4. "I do not understand how this money can be spent on a private residence of
any government employee, especially when that employee has two
residences at his disposal in Cape Town and Pretoria. "

2.7.5. "Whether this construction is being performed for President Zuma as

President of SA or as a favour as ANC President, I would suggest it is
misuse of state funds to the benefit of a private individual, possibly to curry
political favour for the Minister of Public Works or a DG. When the President
is no longer the incumbent he is not entitled to state housing but he will enjoy
the benefits of the modifications to his private estate in perpetuity . "

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2.7.6. " While the majority of people in this country still struggle and fight for survival
it is deeply disturbing to discover that the President and some of his close
senior supporters feel that it is all right to abuse their positions to benefit
themselves and each other at the expense of the nation and all her citizens.
These individuals, in their capacities as servants of the people, should be
held to task if they are in any way guilty of wrongdoing, abuse of power or
corruption. If the allegations in the press on what is happening with the
President's private homestead in Nkandla are true then the President and
those involved in facilitating these massive renovations are possibly guilty of
a number of transgressions and should be held accountable. At the least
these allegations should be grounds for you and your team to conduct some
sort of investigation." (emphases added)

2.8. A complainant submitted that the allegations made by the media in
connection with the developments at the President's private residence at
Nkandla show that the President acted in violation of the Ministerial
Handbook and that it was disingenuous for him to deny that he was unaware
of the costs involved.

2.9. Ms L Mazibuko, Member of Parliament and Parliamentary Leader of the
Democratic Alliance (DA), lodged a further complaint with me in terms of the
Executive Members' Ethics Act, on 12 December 2012. She requested that I
investigate allegations that members of the President's family improperly
benefitted from the Nkandla Project and that this constituted a violation of the
Executive Ethics Code.

2.10. Prof P De Vos of the University of Cape Town lodged a complaint on 21
November 2012 in connection with a statement allegedly made by the
President to the National Assembly on 15 November 2012, where he denied
that the state had paid for the construction of any house for him and advised

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that the development of the first phase of his private residence was financed
by a loan secured from a bank through a mortgage bond in respect of the
property. A subsequent media article alleged that it was not true and Prof De
Vos suggested that the President may have misled the National Assembly,
which would constitute a violation of the Executive Ethics Code. Though
making reference to the Executive Members' Ethics Act, Prof de Vos'
complaint was investigated under the Public Protector Act as members of the
public have no locus standi under this Act, as section 4 restricts the power to
lodge complaints to members of national and provincial legislatures, the
President and Premiers in the provinces.

2.11. I informed the President in detail of the complaints received from Ms L
Mazibuko and Prof De Vos in a letter addressed to him on 29 January 2013.

2.12. I should mention that the article referred to in paragraph 2.1 above was not
the first published by the media on allegations of opulent public spending at
the Nkandla private residence of the President. The first article containing
allegations of unwarranted excessive expenditure at President Zuma's
private residence was published by the Mail and Guardian newspaper on 04
December 2009, under the heading "Zuma's R65m Nkandla Splurge".

2.13. Except for the release of a statement by the Presidency on 03 December
2009, denying that government was footing the bill, nothing appears to have
been done by government to verify the 2009 allegations or attempt to arrest
the costs which the article predicted would continue to rise. Three years later
and a year after a complaint was lodged with me, the Minister of Public
Works appointed a Task Team of officials from the departments involved in
the impugned upgrades at the President's private residence, to investigate
specific matters in relation thereto. The Task Team's report was only
released to the public on 1 9 December 201 3.

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2.14.

The essence of the complaints had three key dimensions. The complainants
were essentially alleging that:

2.1 4.1 . There was no authority for the expenditure that was allegedly incurred by the

state in respect of upgrades made at the President's private residence under
the auspices of improving security. Even if there was authority, the upgrades
were excessive or "opulent' and transcended such authority;

2.14.2. The procurement process in respect of the security measures installed and
implemented was improper and resulted in unduly excessive amounts of
public money being spent unnecessarily; and

2.14.3. The conduct of the President in relation to implementing the impugned
upgrades at his private residence may have been unethical and in violation of
the Executive Ethics Code.

3. THE POWERS AND JURISDICTION OF THE PUBLIC PROTECTOR

3.1 . Mandate of the Public Protector

3.1.1. The Public Protector is an independent institution, established under section

181 (2) of the Constitution to support and strengthen constitutional democracy
by investigating any conduct in state affairs or in the public administration in
any sphere of government, that is alleged or suspected to be improper or to
result in any impropriety or prejudice; reporting on that conduct; and taking
appropriate remedial action as mandated by section 1 82 of the Constitution
and relevant legislation.

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3.1.2. Section 182(2) of the Constitution states that the Public Protector has
additional powers and functions prescribed by national legislation.

3.1 .3. The Public Protector Act elaborates on the investigation powers of the Public
Protector and section 6(4) thereof specifically provides that the Public
Protector shall be competent to investigate, on his or her own initiative or on
receipt of a complaint, inter alia, any alleged:

3.1 .3.1 Maladministration in connection with the affairs of government at any level;

3.1 .3.2 Abuse or unjustifiable exercise of power or other improper conduct by a
person performing a public function; and

3.1 .3.3 Improper or unlawful enrichment or receipt of any improper advantage by a
person as a result of an act or omission in the public administration or in
connection with the affairs of government at any level or of a person
performing a public function.

3.1.4. Section 8(1) of the Public Protector Act states that the Public Protector may
make known to any person any finding, point of view or recommendation in
respect of a matter investigated by him or her.

3.1.5. Sections 3(1) and 4(1 )(a) of the Executive Members' Ethics Act provide that
the Public Protector must investigate any alleged breach of the Executive
Ethics Code on receipt of a complaint by a Member of Parliament against a
Cabinet member. According to section 1 of the Act, "Cabinet member"
includes the President.

3.1.6. When investigating an alleged breach of the Executive Ethics Code, the
Public Protector, by virtue of section 3(4) of this Act, has all the powers

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vested in her/him in terms of the Public Protector Act. Section 4 further states
that nothing in this Act may prevent the Public Protector from investigating
any complaint by a member of the public in accordance with the Public
Protector Act.

3.1 .7. The complaints lodged and the insinuations made against President Zuma

relate to allegations of maladministration and improper conduct in state
affairs and unethical conduct by the President, and accordingly fall within the
jurisdiction and powers of the Public Protector.

3.2.1. The investigation was conducted in terms of the provisions of section 182 of

the Constitution, sections 6 and 7 of the Public Protector Act. The complaint
lodged by Ms Mazibuko of a possible violation by the President of the
Executive Ethics Code was received when an investigation was already
under way, albeit at a slow pace due to capacity constraints, among others.
The complaint was addressed by ensuring that part of the investigation that
had been on-going for a year, was conducted in terms of sections 3 and 4 of
the Executive Members' Ethics Act.

3.2.2. Section 3(2) of this Act provides that the Public Protector must submit a

report on an alleged breach of the Executive Ethics Code to the President, if
the complaint is about a cabinet member, within 30 days of the receipt of
thereof.

3.2.3. However, section 3(3) states that if the Public Protector reports at the end of
the 30 day period that the investigation has not been completed, the Public
Protector must submit a report when the investigation has been completed.

3.2.

The legal framework of the investigation

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3.2.4. The President suggested, in submissions to me during the investigation, that
I failed to comply with the 30 day period and also to report that my
investigation had not been completed. He requested that I should indicate in
my report whether I had complied with the said provisions, and if not, whether
the delay in doing so is justifiable. The President further required of me to
indicate whether he has the power to condone any non-compliance.

3.2.5. The President's legal team further contended that the provisions of sections
3(2) and 3(3) are prescriptive and that non-compliance would negate the
validity of the investigation.

3.2.6. As I have indicated above, I received only one compliant in terms of the
Executive Members' Ethics Act, i.e. from Ms L Mazibuko, MP of the
Democratic Alliance, in connection with allegations that the President's family
improperly benefitted from the Nkandla Project. Her complaint was lodged on
1 2 December 201 2, a year after the investigation commenced.

3.2.7. On 29 January 2013, I informed the President in writing of the complaint and
my investigation thereof and that he would be afforded an opportunity to
respond thereto, once I had obtained more detailed information pertaining
thereto.

3.2.8. The President was therefore not only informed of the investigation. He was
also advised that it was not completed 48 days after receipt of the complaint.
This period included the end of the year festive season and therefore several
public holidays.

3.2.9. It was simply not possible to have concluded the investigation earlier,
because it was an integral part of the on-going investigation in terms of the
Public Protector Act. The President never raised this issue with me in

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subsequent correspondence and when I met with him on 11 August 2011 or
at any other stage objected to my investigation.

3.2.10. More importantly though, I respectfully do not accept the contention by the
President and his lawyers' that if the Public Protector fails to comply with the
30 day period, it could impact on the validity of the investigation. This period,
in my respectful view, was determined by the Legislature to ensure that an
investigation against a member of the executive regarding a violation of the
Executive Ethics Code should be expeditious, if possible. An executive
members' public accountability, in my view, cannot lapse if the 30 days
period is not met. I am particularly saddened by the fact that such a
submission was made by the ultimate custodian of executive accountability.

3.2.11. If the investigation takes longer than 30 days, then the Public Protector can
issue the report when he/she is ready to do so. The only requirement is that
the President should be informed. Regarding the President's complaint in his
submission that inadequate regard had been given for the delay in finalizing
the investigation, I advised him and his lawyers that there is also no provision
in this Act or any other law that requires of the Public Protector to explain to
the President why the investigation took longer than 30 days to complete.
The explanation in the Provisional Report was accordingly not exhaustive as
it simply meant to highlight some of the hurdles faced in undertaking the
investigation leading to the delay in its finalisation.

3.2.12. Section 3(4) provides that when the Public Protector conducts an
investigation in terms of the Act, he/she has all the powers vested in the
Public Protector, in terms of the Public Protector Act. Consequently, even if
the submissions made by the President and his legal team carried any merit,
it would not have any impact on the validity of my investigation in terms of

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section 182 of the Constitution and sections 6 and 7 of the Public Protector
Act, that covered the very same issues.

3.2.13. There is no provision in the Constitution, the Public Protector Act or the
Executive Members' Ethics Act, that authorizes the President to condone any
action or omission of the Public Protector. In this case, as I have stated
above, I respectfully hold the firm view that there was no conduct failure on
my part in the investigation of the matters concerned.

3.2.14. The suggestion that the duty to account for one's alleged ethical violations
lapses in the event of non-compliance with the reporting requirements appear
at odds with the spirit of the Act and public accountability in general. It seems
odd that the right of members of the public to exact accountability with regard
to ethical conduct by members of the Cabinet, through their legislative
representatives, would be extinguished simply because investigative
timelines have been missed. Clearly the timelines are meant to ensure
efficient handling of such matters but certainly not for members of the
Executive to evade accountability.

3.2.15. It must be noted that this is the first time such an objection is raised. When I
came in as Public Protector there were matters that had been going on for
longer than 30 days from my predecessor which I completed as soon as
possible and presented the reports to the President without hurdles.

3.2.16. I have also considered that if time lines have an impact of the validity of an
on-going investigation, it could be equally true that failure by the President to
meet his 14 day timeline would absolve Parliament of its duty to entertain the
President's report regarding how he has dealt with the Public Protector's
report. This certainly could not have been the intention of the architects of the
legislation.

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3.2.17. The need for a speedy resolution of these matters cannot be contested.

However, an approach that supports public accountability and, accordingly,
the rule of law, would not seek to aid members of the executive to evade
accountability. The approach would help review the resource requirements
and assist to address capacity gaps. It is a well-known fact that I have
appealed to Parliament for more resources for my office, particularly
resources dedicated to the additional statutory mandates that were given to
the office in the past few years, without additional resources specifically
dedicated to those new mandates. This applies particularly to the Executive
Members' Ethics Act, Protected Disclosures Act, 26 of 2000 and Housing
Measures Protection Act, 95 of 1998. While Parliament initially accepted the
request without reservation, in the last two years, questions have been raised
regarding the deservability of the additional resources. The reality though is
that no resources were ever assigned for the implementation of these
additional mandates and while the office has always struggled to meet the 30
day requirement, the increase in work load and delays in securing answers
have compounded the situation.

3.3. Balancing State Security Considerations with Open Democracy
Requirements

3.3.1 . As the investigation progressed towards reporting, questions arose regarding
whether the report should be kept as a confidential report in view of the
subject matter being security installations and many of the regulatory
instruments and sources of evidence being classified documents. These
questions had to be dealt with against the backdrop of the matter already
being in the public domain since 2009 and the narrative being riddled with
suspicions of impropriety and a cover up. The context of open democracy

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being one of the foundational values of South Africa's democracy, as
entrenched in section 1 of the Constitution, also had to be taken into account.

3.3.2. Organs of state affected by the investigation, mainly the security cluster,

sharply raised the security question towards the conclusion of the
investigation. By February 2013, the concerns culminated in outstanding
documents being withheld on account of security and delays in conducting an
inspection in loco at the Nkandla residence. Threats of litigation were made
and eventually on 8 November 2013, government departments took me to
court ostensibly for not giving them enough time to assess the Provisional
Report for possible security breaches. In reality the cluster advanced
arguments that questioned my power to scrutinize the exercise of power by
security Ministers and that also challenged security implications of the
provisions of the Provisional Report that had no relevance to security.
Incidentally, the bulk of the objections were withdrawn when the investigation
team eventually met with a Task Team of security cluster officials I had
requested be constituted to depoliticize the security assessment of the
Provisional Report. By then it had dawned on the security cluster that
government had made public most of the contested information in a 12 000+
page batch of documents given to the M&G Centre for Investigative
Journalism {amaBhungane). This had been done in June 2013 in response to
a court application brought in terms of the Promotion of Access to Information
Act 3 of 2000.

3.3.3. My approach regarding balancing the dictates of open democracy as a pillar

of public accountability with legitimate state security concerns, was informed
by section 32 of the Constitution read with Section 8(2A)(a) of the Public
Protector Act provides that any report issued by the Public Protector shall be
open to the public, unless the Public Protector is of the opinion that
exceptional circumstances require that the report be kept confidential.

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3.3.4. In the event that the Public Protector is of the opinion that exceptional
circumstances require that a report be kept confidential, the Parliamentary
Committee on Justice and Constitutional Development must be furnished
with the reasons therefor and, if the Committee concurs, such report shall be
dealt with as a confidential document in terms of the rules of Parliament.

3.3.5. Exceptional circumstances shall, in terms of section 8(2A)(c) of the Public
Protector Act, exist if the publication of the report is likely to, inter alia:

• Endanger the security of the citizens of the Republic;

• Disturb the public order or undermine the public peace or security of the
Republic;

• Be prejudicial to the interests of the Republic.

3.3.6. In considering this issue, I took cognizance of the fact that some of the
information that was provided to me during the investigation related to the
security measures that were taken at the President's private residence in its
capacity as a National Key Point. The witnesses and officials that provided
such information during the investigation did so in terms of their obligation to
cooperate with my investigation in terms of the Public Protector Act.

3.3.7. Some of the information obtained during the investigation was classified as
"Top Secret" by the owners thereof. In terms of the provisions of the
Minimum Information Security Standards policy, this means that the
information is regarded as being of such a nature that its unauthorized
disclosure/exposure can be used by malicious/opposing/hostile elements to
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3.3.8. The security of the President is of utmost importance to the safety of the
state and the information in respect of the Nkandla Project was throughout
the investigation handled with sensitivity and the necessary precautions.

3.3.9. I took the additional precaution in this regard to provide the Ministers of the
Security Cluster with an opportunity to comment on security issues, referred
to in my draft provisional report, which concerned them to enable me to
consider whether it should be masked in or removed from my final report.
The court application (referred to below) brought by the Ministers of Public
Works, Police, State Security and Defence was later withdrawn.

3.3.10. Having considered all the inputs provided to me in this regard, I had to strike
a balance between the obligation in terms of the Public Protector Act to issue
a report that is open to the public, and not compromising the security of the
President and the state. I concluded that:

(a) Since Public Protector proceedings are inquisitorial, based on the
relevant provisions of the Constitution, the Public Protector Act and the
Executive Members' Ethics Act and as the matter involved the President
of our country and the appropriation of public funds, the reporting has to
be open and transparent;

(b) The information referred to in this report relates to matters of
procurement and ethical conduct. The focus is not on the nature and
extent of the security measures installed and implemented at the
President's private residence;

(c) Most of the information concerned has been in the public domain for
approximately two years. It reached the public domain by means of
media reports based on information obtained by investigative journalists

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and voluminous documents provided by the Minister of Public Works;
and

(d) The impact of the failure to disclose the relevant information contained
in this Report would be that the public would not be informed of the
extent of my investigation, the basis for my findings and the reasoning
for the remedial action taken. This would not be in the public interest or
in the interest of the affected parties and institutions.

(e) Due to the fact that the report of the DPW Task Team was declassified,
and the bulk of the information and documentation relating to matters of
security were already in the public domain by the time my investigation
was concluded, the issue of whether or not my report should be made
public became moot.

3.4. Security Cluster objections to the investigation and preference for
investigations by the SIU and Auditor General

3.4.1. After a smooth flow of information from affected organs of state, including
extensive documents received from the DPW, the Minister of Police suddenly
raised an objection to the investigation. He questioned the need in the light of
government having established an internal task team that had made findings
on the matter and that the internal process had not yet been concluded as
investigations by the Auditor General and the Special Investigation Unit
(SIU), which had been recommended by the Task Team had not yet been
undertaken. There was also a veiled questioning of the authority of my office
to investigate a security matter and to access related security documents.

3.4.2. The objection was first expressed in Minister Nathi Mthethwa's letter of 22
March 2013, which should have been a response to a request for information

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in the possession of the SAPS. He indicated that he had difficulty providing
the information in the light of the concerns I have alluded to, and requested a
joint meeting with his security cluster colleagues to iron out issues.

3.4.3. This followed my approach to Minister Mthethwa in writing on 1 1 February
2013, informing him of my investigation and requesting copies of the relevant
documents relating to the declaration of the President's private residence as
a National Key Point and the procedure followed in terms of the relevant Act
and the Cabinet Policy on Security Measures at the Private Residences of
the President, Deputy President and former Presidents and Deputy
Presidents of 2003.

3.4.4. In his letter to me dated 22 March 2013,, Minister Mthethwa alluded to a
statement issued by the Minister of Public Works on the report of the internal
Task Team that was appointed by the latter and specifically to the
recommendations made in the report that the matters concerned should be
referred to a (at the time) to-be-established Special Investigating Unit and the
Auditor-General for further investigation and stated that:

"/ am concerned that you have now decided to investigate the matter even
though a number of processes are underway to deal with the
maladministration identified by the Task Team. In effect, an allegation or
suspicion of maladministration no longer exists . The Task Team has
identified maladministration and, therefore, the Ministers in the JCPS Cluster
have decided that a Special Investigating Unit and the Auditor-General must
conduct a full investigation and audit. Any other appropriate steps will also be
taken.

I have considerable difficulty in complying with your reguest to provide you
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compromise the security arrangements in place at the President's private
residence, it will subject to scrutiny the methodology used and the factors
taken into account when considering the declaration of a national key point.
This could compromise national security.

I have discussed your request with the other Ministers of the J CPS Cluster
involved in the matter and with the Minister of Justice and Constitutional
Development. Whilst every effort has been made to cooperate with you and
while every effort will continue to be made to continue to cooperate with you,
the Ministers do share some of my concerns and have raised others. They
have, therefore, directed me to request you to meet with all of us to discuss
your investigation and the documents which you have requested." (emphasis
added)

3.4.5. The meeting as requested by the Minister of Police took place on 22 April
2013 and was also attended by the Ministers of Public Works and State
Security. At the meeting, I explained in detail the constitutional and statutory
mandate of the Public Protector to investigate the matters concerned. I also
emphasized the fact that my investigation was already at an advanced stage
and that the Minister of Public Works and the President had been informed of
the investigation when it commenced and complied with consequent
document and information requests. A letter from me addressed to the
Minister of Police, dated the same day, was also presented to the Ministers.
In this letter I stated, inter alia, that:

"It was noted during my investigation to date that reference is often made to
the fact that the information that I requested is classified or 'Top Secret' and
could therefore not be provided to me. However, I could find no indication in
the National Key Points Act, 1980, the said Cabinet Policy, the Protection of
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could be interpreted as prohibiting the Public Protector from having access to
any information that relates to state affairs, which, I must point out, would be
a contradiction of section 7(4) of the Public Protector Act.

Section 7(4) gives the Public Protector full and free access to any information
or document that has a bearing on any matter that is being investigated by
him or her, whether it was classified as top secret or not.

You will note that section 7(4) (a) of the Public Protector Act authorizes me to
request and subpoena any such information from any person in the Republic
with no exceptions. The Public Protector also has powers of search and
seizure to obtain documentation and information relevant to any
investigation. The provisions are consistent with the Public Protector being
one of the only 2 specified safe harbours under the Protected Disclosures Act
and one of the enforcers of the Promotion of Access to Information Act No 2
of 2000.

Information in the possession of the Public Protector is furthermore protected
by the provisions of section 7(2) of the Public Protector Act, in terms of which
it may not be disclosed without his or her consent. In terms of section 6(8),
not even a court of law can force the Public Protector to disclose such
information.

Under the circumstances, you will appreciate that I find it difficult to
understand why classified and top secret information can be shared with the
internal Task Team, the Special Investigation Unit and the Auditor-General,
which according to your letter under reply will be mandated to investigate this
matter, but not with the Public Protector. I am further perplexed and
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information that I am by law entitled to have access to 'could compromise
national security. '

I must further express my concern about the intention expressed in your
letter to establish a Special Investigating Unit (appointed by and reporting to
the President) to investigate the matters that I am currently investigating. As
indicated earlier, my investigation is already at an advanced stage, about
90% complete. The investigation team has already interviewed a number of
witnesses, studied a wide range of voluminous documents and the relevant
legislation and other prescripts applicable. Obviously, my office has incurred
substantial expenditure in conducting the investigation so far. To appoint
another body to investigate the same matters would, in my respectful view,
constitute a duplication of efforts and associated costs and other resources.

From what is stated above, you will note that my investigation into the
matters referred to had already commenced in 201 1, before the internal Task
Team was appointed by the Minister of Public Works. As indicated, my
investigation is already at an advanced stage and will be concluded soon,
provided that I receive the outstanding information that is required from your
office and the Minister of Public Works timeously. "

3.4.6. It should be noted that when approached by my office on 25 March 201 3, the
Auditor General South Africa, indicated that the request by the DPW to
investigate the matter concerned had been declined. During the meeting with
the said Ministers on 22 April 2013, I informed them accordingly.

3.4.7. It was agreed at the meeting of 22 April 2013 that I would continue with my
investigation. The Ministers attending indicated that they would cooperate
with me by providing me access to the requested classified documents
during a briefing of the processes followed. It was also agreed that I would be

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briefed on the report of the Internal Task Team that investigated certain
aspects of the Nkandla Project.

3.4.8. I was therefore surprised to receive a letter from the Acting State Attorney on
24 April 2013, acting on behalf of the Ministers of Public Works, State
Security and Police. Referring to the meeting of 22 April 2013, he stated,
inter alia, that:

"Monday's meeting with you suggests to our clients that you have embarked
on a parallel process to investigate the matters currently under investigation
by them. The additional steps being taken by them will also impact on the
final determination of the matter by our clients who will decide in consultation
with the JCPS Cluster Ministers and with the Cabinet what further measures
should be taken. Any transgressions will be dealt with firmly by our clients.
Our clients believe that the SIU has the competency and powers to
conduct this investigation and also point out that you yourself have
previously collaborated with the SIU during the handling of sensitive
complaints. In any situation where you seek to hold people accountable, the
existence of parallel investigations can compromise the outcome.

Our clients, therefore propose that they continue to brief you on the matter
and that they continue to update you on the investigations, but that you hold
your investigation in abeyance until the processes embarked upon have
been completed." (emphases added)

3.4.9. The Head of my Private Office responded to the Acting State Attorney on 10
May 2013, informing him in detail of the steps that had been taken by me in
the investigation and that to suspend it would have been tantamount to a
breach of my constitutional and legislative responsibilities.

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3.4.10. The proposed briefing meeting was held on 31 May 2013. It was attended by
the Ministers of Public Works, Police, Justice and Constitutional
Development and Defence and Military Veterans. Also present was Mr E
Daniels, the Chief State Law Advisor, Lt Gen Ramlakan, the former Surgeon-
General, and other high ranking officials.

3.4.11. The Chief State Law Advisor suggested that I should stop my investigation
until the recommendations of the internal Task Team had been implemented
and the investigations of the Auditor-General and the Special Investigating
Unit had been concluded.

3.4.12. At the time of the conclusion of my investigation, no investigation had been
conducted by the Auditor-General and the Special Investigating Unit had not
yet been authorized to investigate the matter. In the first week of January
2014, I was advised by the Head of the SIU, Advocate Vas Soni, SC that a
proclamation was finally received shortly before the SIU offices closed for the
Christmas holiday. He further advised that the terms of reference are limited
to the conduct of officials and service providers in relation to the procurement
of goods and services in the Nkandla Project.

3.4.13. At a further meeting that took place on 31 May 2013 arguments were again
advanced that it was improper of me to continue to investigate against the
wishes of the Ministers, who were satisfied with the findings of the Task
Team and had decided, at the recommendation of the Task Team, that the
next phase should be investigations by the Auditor General and the SIU. The
Chief State Law Advisor, Mr Enver Daniels supported the Ministers at the
meeting in question, arguing at some point that "constitutionally speaking" it
was improper for me to investigate when the Ministers had clearly decided as
members of the Executive how they wanted the matter investigated.

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3.4.13.1 With the support of the Chief State Law Advisor and the State Attorney, the

Minister insisted that my investigation should be suspended, (despite the fact
that it was already well advanced at the time and my persistently making this
point to them) pending the outcome of investigations to be initiated by the
Auditor-General South Africa and a to-be-established Special Investigating
Unit, which was requested by the Minister of Public Works.

3.4.14. The impasse was eventually overcome when an agreement was reached

with the Ministers involved at the meeting of 31 May 2013, that I would
continue with the investigation and that they would assist with providing the
outstanding information. The contributions of the Minister of Justice and
Constitutional Development and the Minister of Defence and Military
Veterans regarding my office's powers were instrumental in the
breakthrough.

3.5.1. On 5 November 2013, an article appeared in The Star newspaper claiming

that information was leaked from my draft Provisional Report, which indicated
that I had exonerated the President from all wrongdoing. The journalist
responsible for the article later told me at a media briefing that his information
came from two senior government officials of the security cluster.

3.5.2. The Mail and Guardian newspaper published an extensive article on 29

November 2013, on what purported to be "key features" of my draft
Provisional Report learnt from undisclosed sources. This article was also
based on 12 000 pages of documents obtained from the Minister of Public
Works by the M&G Centre for Investigative Journalism in June 2013 by
means of an application in terms of the Promotion of Access to Information

3.5.

The Alleged Leaking of Information from the Provisional Report:

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Act, 2000. All these documents, including several that are classified, were
published on the Internet and are available at www.amabhungane.co.za.

3.5.3. The President and Gen Cele raised concerns during the investigation
regarding the impact of the alleged leaks of parts of my Provisional Report to
the media.

3.5.4. The leaking of information to the media on my investigation occurred despite
extreme measures implemented by my office to secure the information and
evidence obtained during the investigation.

3.5.5. Although the alleged leaking of information from my draft Provisional Report
may have constituted a violation of the provisions of section 7(2) of the Public
Protector Act that provides only for disclosure if the Public Protector so
determines, I decided not to lodge any criminal charges, as there had been a
number of leaks involving a large part of the print media. An investigation
would have been counter-productive and, in my view, not in the public
interest. I stated my view in this regard publicly and indicated that forthwith
no provisional reports will be given to parties.

3.5.6. I was therefore surprised to receive a letter from the Minister of State
Security on 3 December 2013 informing me of his intention to investigate the
so called "leaks" from my draft provisional report, in terms of section 2(1 )(b)
of the National Strategic Intelligence Act, 1994.

3.5.7. I informed the Minister on 3 December 2013 and 12 December 2013 that he,
in my respectful view, does not have powers in terms of the said Act, to
initiate any investigation and that I was very uncomfortable with the fact one
of the parties to whom my draft provisional report was presented on 1
November 2013, was now investigating the alleged leaking thereof to the

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media. In addition, I expressed my concern that any such action by the
Minister would have an impact on my staff assisting me in this investigation,
who are to act without the fear of being intimidated or victimized. The Minister
was further advised that it would be improper for me and my staff to be
subjected to the process that he initiated as it would infringe on the
constitutional independence of my office.

3.5.8. The National Commissioner of the SAPS subsequently informed me in
writing on 18 December 2013 that she had given instructions for a criminal
investigation in terms of section 7(2) of the Public Protector Act. In my
response dated 19 December 2013, I indicated to the National Commissioner
that four of what purported to be Provisional Reports in respect of different
matters unfortunately leaked to the media in the last week of November
2013. I explained my reasoning for not laying any chargers and requested
her to advise whether she was investigating all four instances or only the
Nkandla matter. The National Commissioner was also referred to the
provisions of section 6(8) of the Public Protector Act in terms of which the
Public Protector and her/his staff are not compellable to answer any
questions in proceedings before a court of law or any other body or
institution, in connection with information relating to any investigation, and
that I was not willing to be subjected and to subject any of my staff to her
investigation.

3.5.9. From her response, dated 24 January 2014, it was clear that the National
Commissioner was only investigating the alleged leaking of my draft
Provisional Report on the Nkandla Project and that she was persisting with it,
for reasons unknown to me. I obtained legal advice and informed the
National Commissioner on 28 January 2014 that as it is only the Public
Protector that can make a determination of disclosure in terms of section 7(2)
of the Public Protector Act, it is only the Public Protector that can lodge a

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complaint of a violation thereof. The National Commissioner, in my respectful
view, does not have the powers to decide mero motu, to conduct an
investigation into this matter where I do not wish to press any charges. Her
investigation therefore has no legal standing and I reiterated that my staff and
I would not be part of it.

3.5.10. The investigations by the Minister of State Security and the National
Commissioner of the SAPS caused discomfort among the members of the
investigation team, who perceived it to be aimed at intimidating and
victimizing them and me. My team and I were especially offended by
insinuations that the leak originated from my office and that I had personally
admitted to the leak. I was also concerned about the fact that some members
of Parliament, charged with the duty to hold my office to account, while
protecting it from undue attacks, joined in the unfair and unwarranted
mudslinging.

4. THE ISSUES CONSIDERED AND INVESTIGATED

Based on an analysis of the complaints, the following issues were considered
and investigated:

4.1 . Was there any legal authority for the installation and implementation of
security measures and the construction of buildings and other items by the
state at the President's private residence and was such authority violated or
exceeded?

4.2. Was the conduct of relevant authorities in respect of the procurement of
goods services relating to the upgrades, improper and in violation of relevant
Supply Chain Management prescripts?

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4.3.

4.4.
4.5.

4.6.

4.7.
4.8.

4.9.
4.10.

4.11.

4.12.

Did the measures taken and buildings and items that were constructed and
installed by the DPW at the President's private residence go beyond what
was required for his security?

Was the expenditure incurred by the state in this regard excessive or amount
to opulence at a grand scale, as alleged?

Did the President's family and/or relatives improperly benefit from the
measures taken and buildings and other items constructed and installed at
the President's private residence?

Was there any maladministration by the public office bearers, officials and
other parties involved in this project?

Was there any political interference in the implementation of this project?

Were funds transferred from other much needed DPW projects to fund this
project?

Is the President liable for some of the cost incurred?

Were there ethical violations on the part of the President in respect of this
project?

Are there other maladministration issues that arose from the complaints and
the investigation process?

Are there systemic deficiencies regarding the administration of security
benefits of Presidents, Deputy Presidents, Former Presidents and Former
Deputy Presidents?

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THE INVESTIGATION

5.1.

The Scope of the Investigation

5.1.1. The investigation focused mainly on the period from the date that President

Zuma took office on 9 May 2009 to the end of July 2013. The substantive
scope focused on compliance with the law and prescripts in regard to
implementation of the security measures installed and implemented and the
propriety of the conduct of the President and others involved in the Nkandla
Project.

5.1 .2. Due to the lack of resources in my office, the delays in the investigation and

the other challenges referred to in this report, it was not possible to
investigate every allegation and suspicion of impropriety that was raised by
different role players that were approached and engaged.

5.1 .3. This investigation did not include accessing bank statements and telephone

records of people with questionable relationships. Among the suspicions
raised were favouritism in the selection of and overcharging by service
providers contracted by the DPW and improper benefits that may have been
provided to officials in return for the awarding of contracts.

5.1 .4. Fortunately, the Proclamation issued by the President on 20 December 2013

mandated the Special Investigation Unit (SIU) to investigate, inter alia,
overpayments and duplicate payments made to the suppliers of the DPW in
respect of the Nkandla Project and any actual or potential benefits received
by officials of the DPW due to their interest in the awarding contracts to
certain suppliers.

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5.1.6.

5.2.

5.2.1.

5.2.1.1

5.2.1.2

Section 5(6)(b) of the Special Investigations and Special Tribunals Act, 1996
provides that the Public Protector may, if she or he deems it appropriate,
refer any matter which comes to her or his attention and which falls within the
terms of reference of a Special Investigation Unit, to such Unit.

I have accordingly decided to alert the SIU of the allegations and suspicions
referred to above to the SIU to investigate further in terms of the said
Proclamation.

The Methodology Employed in the Investigation

The investigation included:
Interviews:

Interviews were conducted with:

Ms G Mahlangu-Nkabinde, the former Minister of Public Works (telephonic)
on 23 August 2013;

Deputy Minister H Bogopane-Zulu, who was the Deputy Minister of Public
Works at times material to the investigation, on 14 May 2013;

The following officials of the DPW that were involved in the Nkandla Project:

(a) Ms G Pasley, the Chief Quantity Surveyor, on 21 February 2013;

(b) Ms S Subban, Deputy Director-General, on 22 February 201 3;

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(C)

(d)
(e)
(f)

(g)

(h)

(i)
(j)

(k)
(I)

Mr Z Rambau, the Chief Director: Security Management, on 22
February 2013;

Ms M Foki, the Director: Portfolio Performance and Monitoring, on 22
February 2013;

Mr K Khanyile, the former Regional Manager of the Durban Regional
Office, on 27 February 2013;

Mr J Rindel; the Project Manager, on 4 and 5 March 2013;

Mr S Mahadeo, the original Project Manager, on 5 March 2013;

Mr S Nadu, Assistant Director: Project Budget Administration based at
the Durban Regional Office, on 5 March 2013;

Mr R Danhiram, Head of Key Accounts Management and member of
the Regional Bid Adjudication Committee, on 5 March 2013;

Ms S Ngubane, Director: Finance and Supply Chain Management and
Chairperson of the Regional Bid Adjudication Committee, on 6 March
2013;

Mr J P Crafford, the Director: Architectural Services, on 13 and 18
March 2013;

Ms C Motsisi, the former Chief Financial Officer, on 14 March 2013;
Mr R Samuel, the former Deputy Director-General, on 20 March 2013;

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(n) Mr S Malebye, the former Acting Director-General, on 12 September
2013;

(o) Brigadier S J Adendorff, the Head of Security Advisory Service of the
South African Police Service (SAPS), on 23 May 2013;

(p) Mr M Makhanya of Minenhle Makhanya Architects, on 5 March 201 3;

(q) Mr D Gqwaru and Ms. P Naidoo of R&G Consultants, on 7 March 201 3;

(r) Mr L Uys and Ms. G Higgins of Uys and White Landscape Architects, on
16 April 2013;

(s) Ms P Mfeka and Mr N Mfeka of Moneymine 31 CC, on 1 5 April 201 3;

(t) Mr Y Ramsudh and Ms. Y Patel of Ramcon Project Managers, on 15
April 2013; and

(u) Ms T Nene of Bonelena Construction Enterprise and Projects, on 16
April 2013.
5.2.2. Meetings:

I held meetings with:

5.2.2.1 His Excellency President J G Zuma, on 1 1 August 201 3;

5.2.2.2 Dr R C Lubisi, the Director-General in the Presidency, in January 2012 and
17 December 2013;

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5.2.2.3 The Ministers of Police, Mr N Mthethwa, Public Works, Mr T W Nxesi and
State Security, Dr S Cwele on 22 April 2013, 31 May 2013, and 8 August
201 3. The meeting of 31 May 201 3 was also attended by the Chief State Law
Adviser, Mr E Daniels, and other high ranking officials of the Departments
involved;

5.2.2.4 The Minister of Justice and Constitutional Development, Mr J T Radebe, who
also attended the meeting of 31 May 201 3;

5.2.2.5 The Minister of Public Works Mr T Nxesi on 2 July 201 3;

5.2.2.6 The Minister of Defence and Military Veterans, Ms N Mapisa-Nqakula, who
also attended the meetings of 31 May and 8 August 2013;

5.2.2.7 The former Surgeon-General, Lt Gen V Ramlakan and his legal team;

5.2.2.8 Ms J Irish-Qhobosheane, the Acting Chief of Staff of the Ministry of Police;

5.2.2.9 Gen. B Cele, the former National Commissioner of the SAPS and the legal
team that assisted him in in his response to the evidence and information
obtained during the investigation that appeared to implicate him, on 21
January 2014;

5.2.2.10 Mr M Hulley and Adv. B Makhene, the legal team that assisted the President
in his response to the evidence and information obtained during the
investigation that appeared to implicate him, on 21 February 2014;

5.2.3. Analysis of documents and/or information:

5.2.3.1 The following were analysed and perused:

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5.2.3.2 Voluminous documents obtained from the DPW, SAPS and DOD, including:

(a) Internal Memoranda of the DPW;

(b) Minutes of meetings of the DPW Regional Bid Adjudication Committee
(RBAC);

(d) Supply Chain Management records pertaining to the procurement by
the DPW of goods and services;

(e) Cost estimates and Bills of Quantities prepared by R&G Consultants,
the Quantity Surveyors appointed by the DPW for the Nkandla Project;

(f) Records of the WCS financial system of the DPW relating to the cost of
the Nkandla Project;

(g) Certificates of payment by the DPW of consultants and contractors
appointed for the Nkandla Project;

(h) Security Evaluations Reports of the SAPS in respect of the President's
private residence, dated 28 May 2009 and 25 September 2010;

(i) Requirement requests presented to the DPW by the South African Air
Force and the South African Military Health Services;

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(j) Report of the internal Task Team appointed by the Minister of Public
Works to investigate aspects of the Nkandla Project;

(k) An SAPS needs analysis;

(I) Correspondence between the DPW and consultants and contractors;

(m) Documents relating to the apportionment of costs in respect of the
Nkandla Project;

(n) Internal email messages of officials of the DPW and consultants and
contractors;

(o) Designs and site plans of the Nkandla Project;
(p) Progress reports;

(q) A letter addressed to the President by the former Minister of Public
Works, Ms G Mahlangu-Nkabinde reporting progress in respect of the
project, dated 5 November 2010;

(r) An SAPS Information Note relating to the declaration of the President's
private residence as a National Key Point, signed by the Minister of
Police on 8 April 2010;

(s) A Declaration Certificate issued by the Minister of Police on 8 April
2010, declaring the President's Private residence a National Key Point;

(t) Documents of the Industrial Development Corporation relating to its
granting of financial assistance in February 201 1 to Bonelena;

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(u) Numerous newspaper articles published in connection with the project;

(v) Court papers filed in the High Court litigation between Voltex (Pty) Ltd
and Moneymine in case no: 8146/12; and

(w) The 2009-201 4 DPW Strategic Plans.

5.2.3.3 I also accessed the Register of Financial Interests of Members of the
National Executive, referred to in the Executive Ethics Code, on 17
December 2013.

5.2.4. Correspondence

5.2.4.1 Consideration was given to the contents of correspondence with:

(a) The President;

(b) The Minister of Public Works;

(d) High Commissioner Doidge;

(e) The Director-General of the DPW;

(f) The Director-General of the Presidency;

(g) The National Commissioner of the SAPS;

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5.2.5.1
5.2.5.2
5.2.5.3
5.2.5.4
5.2.5.5
5.2.5.6
5.2.5.7
5.2.5.8
5.2.5.9
5.2.5.10

(h) The Acting State Attorney;

(i) The Legal General Manager of Voltex (Pty) Ltd; and
(j) The complainants

Legislation and other prescripts:

The relevant provisions of the following legislation and other prescripts were
considered and applied, where appropriate:

The Constitution;

The Public Protector Act 23 of 1994;

The Executive Members' Ethics Act 82 of 1998;

The Executive Ethics Code of 2000;

The Public Finance Management Act 1 of 1999 (PFMA);

Government Immovable Asset Management Act 19 of 2007 (GIAMA)

The Protection of Information Act 84 of 1982;

The National Key Points Act 102 of 1980 (National Key Points Act);

The Remuneration of Public Office Bearers Act 20 of 1998;

The Kwazulu-Natal Ingonyama Trust Act 3 of 1994;

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5.2.5.11 The Treasury Regulations and Guidelines and directives issued by the
National Treasury;

5.2.5.12 The Ministerial Handbook approved by the Cabinet on 7 February 2007;

5.2.5.13 The Cabinet Policy: Security Measures at the Private Residences of the

President, Deputy President and former Presidents and Deputy Presidents,
approved on 20 August 2003;

5.2.5.14 The South African Defence Review of 1998 (the Defence Review);

5.2.5.15 The Minimum Information Security Standards (the MISS);

5.2.5.16 The Minimum Physical Security Standards; and

5.2.5.1 7 The Supply Chain Management Policy of the DPW adopted on 29 April 2008.
5.2.6. Submissions:

I received submissions in terms of section 7(9) of the Public Protector Act on
the evidence and information obtained during the investigation that appear to
implicate several parties, from:

5.2.6.1 The President;

5.2.6.2 The Minister of Police;

5.2.6.3 The Minister of Public Service and Administration (who was the former

Minister of Defence);

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5.2.6.4 Deputy Minister Bogopane-Zulu;

5.2.6.5 Gen. B Cele, a former National Commissioner of the SAPS;

5.2.6.6 Mr S Malebye, a former Acting Director-General of the DPW;

5.2.6.7 Maj.-Gen. T Kulu, the former Head: Government Security Regulator of the
SAPS;

5.2.6.8 Lt. Gen. V Ramlakan, the former Surgeon-General;

5.2.6.9 Brigadier S J Adendorff, the Section Head: Security Advisory Service of the
SAPS;

5.2.6.10 Mr J Rindel of the DPW Durban Regional Office, who was the DPW Project
Manager of the Nkandla Project from January 2010; and

5.2.6.11 Mr B K Khanyile, who was the Regional Manager of the DPW Durban
Regional OFFICE at times material to the implementation of the Nkandla
Project.

5.2.7. Jurisprudence and Touch Stones from previous Public Protector Reports:

5.2.7.1 On the issue of balancing state security considerations and open democracy
and public accountability imperatives, I also considered and applied the
judgment of the Constitutional Court in the case of Independent Newspapers
(Pty) Ltd v Minister for Intelligence Services; Freedom of Expression Institute
In re: Masetlha v President of the Republic of South Africa and Another
(2008(8) BCLR 771 [CC]).

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5.2.7.2 Touch stones or principles from previous Public Protector Reports were also
considered. In this regard, principles regarding different responsibilities and
processes in a valid supply chain process discussed in reports such as
Against the Rules and Against the Rules Too, On the Point of Tenders, and
Yes We Made Mistakes were considered during the assessment of the
propriety of the conduct of various actors during various stages of the
process of procuring goods and services in relation to the Nkandla Project.
Principles relating to ethical standards developed in the Public Protector
Report titled "The Ethics of Staying in Comfort" were used a part of the
benchmarks when the ethical questions were dealt with.

5.2.7.3 I also considered precedents relating to findings on excesses in the use of
executive privileges made in the Public Protector reports titled "Costly
Moves" and "In the Extreme".

5.2.7 .4 In the case of my investigation into extravagant expenditure by the Minister of
Police on hotel accommodation (Report no 7 of 2011/12), I found that the
Minister, when he became aware of the extent of the expenditure, took steps
to contain it and to prevent a recurrence thereof.

5.2.8. Inspection in loco:

5.2.8.1 I visited the President's private residence and the adjacent premises of the
Nkandla Project to conduct an inspection in loco, on 12 August 2013. During
the visit, I was accompanied by a member of my investigation team, the
Minister of Defence and Military Veterans, Lt. Gen. Ramlakan and officials of
the State Security Agency, the DPW, the SAPS and the DOD.

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5.2.9. Challenges resulting in a delay in finalising the investigation

5.2.9.1 Earlier on I indicated that the President has complained about the delay in

concluding the investigation. He also submitted that his duty to account under
the Executive Members' Ethics Act, including informing Parliament on how he
has dealt with my findings, has lapsed due to such delay. The African
National Congress, which is the governing party in this country, has
periodically insinuated that I was delaying the release of the report to ensure
that I release it close to and in order to influence the 2014 National and
Provincial elections. Such insinuations have not only been untruthful, but
hurtful to my team and I, while having the potential to erode the credibility of
my office and my professional integrity.

5.2.9.2 The reality is that the Presidency was part of the problem as were other

organs of state regarding the delays. My team and I sat in silence when
organs of state that had requested extension after extension to submit
submissions in response to my Provisional Report said nothing when insults
were hurled at my office by their colleagues or supporters in Parliament and
civil society for allegedly sitting on the report in pursuit of a political agenda.
The Presidency repeated the concerns in its final submissions despite having
taken a cumulative period of 9 months to supply requested information.

5.2.9.3 In fact, despite capacity constraints, the report should have been issued by
the end of April 2013, if it were not for delays on the part of the state,
including the Presidency.

5.2.9.4 The investigation process was hampered by a number of challenges, some
of which were alluded to above. Notable among the hurdles already alluded
to are the shenanigans of the security cluster as the investigation

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approached finalisation in the first quarter of 2013. Other hurdles that
militated against the speedy finalisation of the investigation are the following:

(a) Resources:

(i) Due to a lack of resources, the assistance that could be provided to me
to investigate the issues identified from the complaints that related to a
procurement project on the magnitude of more than R200 million, was
confined to a small investigation team operating on a part time basis
while handling other investigations. For a brief period of approximately
three months, an accountant from an audit firm assisted with the
investigation but could not be retained for a longer period due to
financial constraints. If we compare the resources given by government
to Commissions of Inquiries, it must be noted that the budget we are
expected to deploy towards these investigations, is hopelessly
unrealistic. For example, the budget of the commission currently
investigating the so-called arms deal is R42 million.

(b) Access to classified documents:

(i) The fact that the investigation pertained to security measures that were
taken in respect of the President presented a major challenge. Some of
the information that had to be considered is classified and sensitive. It
was sometimes problematic to gain access to relevant documents and
information for the purposes of considering and evaluating the veracity
of the allegations made in respect of the Nkandla Project.

(ii) Gaining access to the report of the internal Task Team appointed by the
Minister of Public Works that investigated certain allegations relating to
the Nkandla Project was a mission. After the Minister of Public Works

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(iii)

(iv)

issued a statement to the media on the findings of the report, I
requested to be provided with a copy thereof, on 24 January 2013.
Several further requests had to be made in this regard. I was only
allowed access to the report of the Task Team on 2 July 201 3.

Despite my several requests, I was not furnished with a copy, but only
allowed to peruse the contents thereof, after which it had to be returned
to the officials of the Ministry of Public Works and the Department of
State Security, due to the fact that it was classified.

A copy of the report has since been secured from the internet following
the declassification and public release of the report by the Minister of
Public Works in mid-December 201 3.

General delays experienced in obtaining information:

The investigation was further hampered by delays experienced in
obtaining information from the relevant departments and Ministries. The
Presidency also took some time to respond to some of the document
and information requests. For example, my request to the Director-
General of the Presidency for information relating to the involvement of
the Presidency in the Nkandla Project and the application of the
Ministerial Handbook, which was addressed to him on 26 August 2013
only got an answer telephonically and from a meeting held in mid-
December 2013. He apologized and advised that he had not received
the correspondence in question. My request to him in his capacity as
the Cabinet Secretary, for access to the Register of Financial Interests
referred to in the Executive Ethics Code to enable me to verify some of
the information that relates to my investigation, also suffered the same
fate. However, I did finally get access in December 2013.

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(ii) When I got an opportunity to enquire from Dr Lubisi about the lack of
response from his office on 31 October 2013, he explained that all
enquiries to the Presidency in respect of my investigation were referred
to the legal advisors. On 31 January 2014, he advised that the
information that I requested in respect of the interaction between the
Presidency and Deputy Minister Bogopane-Zulu would be responded to
by the President. However, I never received any such response from
the President.

(iii) The table below is an indication of some of the other delays that
impacted on the investigation, excluding delays due to the litigation on
security concerns and extensions requested for responses to the
Provisional Report.:

Uhhllt BbAKbK UK
OFFICIAL APPROACHED

REQUEST FOR
INFORMATION

The President

29/01/2013

01/10/2013

9 months

DG: Public Works

15/02/2013

19/03/2013

32 days

Minister of Police

11/02/2013

22/03/2013

41 days

Lt Gen V Ramlakan

06/03/2013

31/07/2013

4 months

DG: Public Works

04/04/2013

26/08/2013

4 months

Figure 1: Breakdown of Delays in Respect of the Investigation

(iv) The urgent High Court application by the Ministers of Public Works,
Police, Defence and Military Veterans and State Security:

(a) On 1 November 2013, I provided the Minister of Public Works and the
Ministers of the Security Cluster with password protected electronic
copies of my draft provisional report on the investigation. This was in
terms of an understanding between us that they would be provided with

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an opportunity to raise any issue that might, in their view, compromise
the security of the President, if contained in my final report to be made
public. I requested them to provide me with their response by 6
November 2013 and later extended the date to 8 November 2013, at
the request of the Minister of Public Works.

(b) However, the Minister of Public Works sent a letter to my office on 7
November 2013 insisting that a further extension be granted to 15
November 2013. He further demanded that I respond within two hours.
At the time I was not in Pretoria and could not be reached by my office.
Before I could further engage with the Ministers on the request, court
papers in respect of an urgent application brought against me by the
Ministers of Public Works, Police, State Security and Defence and
Military Veterans in the North Gauteng High Court, were served on my
office at approximately 09:00 on 8 November 2013. The relief that the
Ministers requested from the High Court was that I should be interdicted
from releasing my provisional report to other affected, implicated and
interested parties, that a further extension should be granted to the
Ministers to respond to the security issues in the draft provisional report
that I presented to them and that once they have submitted their
comments my provisional report should be revised accordingly and
resubmitted to them for their approval that I had dealt with such issues
to their satisfaction.

(c) I had no option but to oppose the application to protect the constitutional
independence and integrity of the institution of the Public Protector and
briefed attorneys and counsel accordingly. After the filing of opposing
and replying affidavits, the Ministers withdrew the application on the
date of the hearing, i.e. 15 November 2013, tendering the legal costs
that the Public Protector SA had to incur, which amounted to more than

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R600 000, excluding the legal costs incurred by the Ministers. This
excessive expenditure could have been avoided had the Ministers acted
reasonably and engaged me personally on the matter instead of
resorting to court action.

(d) The court action by the Ministers also caused a further delay in the
conclusion of the matter as the investigation team had to focus all its
attention to it, instead of expediting the conclusion of the investigation.

5.2.10. Extension of time lines for Submissions in Response to the Provisional

(e) I received numerous requests for extensions of timelines within which
responses, information and evidence were requested from the affected
parties. A number of them were represented by multiple legal teams
who adopted an adversarial approach to my proceedings and their
unavailability to respond to expeditiously, compounded the delays.

(f) The investigation has had an unprecedented number of threats to
litigate right up to the eve of the release of the report. Many of these
threats involved an intention to prevent the publication of the report. The
security cluster minister litigation saga incorporated a threat to litigate to
prevent the publication of the report if the Ministers were not happy with
the final look of the report regarding what they regarded as security
concerns. Most of these, turned out, by the admission of the Task Team
assigned to work with my team to assess the report in question, to be
concerns unrelated to security.

Report

5.2.1 1 . Litigation and Threatened Litigation

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(g) Threats to interdict the issuing of the report were made, inter alia, by
former Commissioner of Police, General Bheki Cele, High
Commissioner Doidge and Mr Makhanya. The latter made an
unprecedented demand that his name be excised from the report as he
does not work for the state and the investigation, in line with "the Public
Protector's mandate" being confined to state affairs. Of course it was
pointed out to the lawyer assisting Mr Makhanya that "state affairs"
include the acts of private actors involved in state operations. It was
pointed out in his case that he acted as Principal Agent for the DPW, in
addition to acting as a private architect and the Principal Agent of
President Zuma, as a private citizen. Reference to jurisprudence from
the Public Protector South Africa v Mail & Guardian Ltd & Others (201 1
(4) SA 420 SCA) court case regarding a PETRO SA investigation by my
office did not seem to assist. The jurisprudence in question enjoins the
Public Protector to follow the state's money, amongst other things.

(h) Some of the threats were founded on a mistaken belief that parties are
entitled to a provisional report and to be given ample time. Some
required periods in excess of a month, to scrutinise such report. All
efforts were made to accommodate access to information needs and to
create further opportunities for engagement, which inevitably caused
further delays. Efforts were also made to accommodate those who felt
being asked to respond in writing was not enough.

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THE EVIDENCE AND INFORMATION OBTAINED DURING THE

INVESTIGATION

PART A: EVIDENCE ON THE SEQUENCE OF EVENTS

6.1.

The Area of Nkandla:

6.1.1. President Zuma was born and raised in the Nkandla area and always

regarded it as his home. His private residence is located on traditional land
leased from the Ngonyama Trust in a rural village approximately 47 km from
Eshowe Town.

6.1 .2. According to the 201 1 Census Report, the Nkandla Municipal area has a

population of 114 416. About forty per cent (43.9%) of the population
between the ages of 15 and 64 are unemployed. Only approximately 10 000
households in the area have access to electricity and more than 7000 have
no access to piped water. Almost 12 000 households are still using pit
latrines.

6.1 .3. The SAPS has a satellite Police Station in the Nkandla area that is managed
by the SAPS in Eshowe.

6.1 .4. According to the records of the KwaZulu-Natal Provincial Department of
Health, there are two district hospitals in the Nkandla area, namely the
Nkandla Hospital, with a bed capacity of 212 and the Ekombe Hospital.

6.1 .5. According to a report of the KwaZulu Natal Department of Health issued on 6

November 2013, the Nkandla area remains one of the most underserved in
terms of the provision of health services, and greater effort is required for the
improvement of service delivery to the community at large. The response

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time for ambulance services, for example, is way below the norm, and this is
compounded by the fact that there are no advanced life support personnel in
the area.

6.1 .6. These harsh conditions were advanced as the basis for the unprecedented

installations in the name of security at the President's private residence. I will
later allude extensively to the questions I raised with the state actors involved
regarding whether or not an approach that is more in line with the role of
public office bearers regarding putting citizens first, was one that provided for
both the first citizen, and the caretakers. This was particularly so as there
were complaints about the paucity of health facilities such as equipped
hospitals, ambulances and adequately resourced police stations.

6.2.1 . President Zuma assumed office on 9 May 2009 as the fourth President of the

Republic of South Africa, since the dawn of democracy, following national
elections in April the same year. He had been the Deputy President of the
republic previously and subject to the same regulatory framework for security
measures for Presidents, Deputy Presidents, Former Presidents and Former
Deputy Presidents.

6.2.2. It was established from the evidence of Mr Rindel, the DPW Regional
Manager and Brigadier Adendorff, the Section Head: Security Advisory
Service that:

6.2.2.1 At the time when Mr Zuma took office as the President of the Republic of
South Africa, his private residence at Nkandla in the KwaZulu-Natal Province
consisted of seven relatively small buildings, commonly referred to as

6.2.

The Events prior to the Nkandla Project

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rondavels, and a kraal for farm animals. There was also a small tuck shop
and a guard hut.

6.2.2.2 The ablution facilities were connected to a french drain system and there was
limited water and electricity supply.

6.2.2.3 The perimeter fencing on the property consisted of a steel palisade fence,
which was of poor quality.

6.3.1 . According to a letter addressed to me by the Minister of Public Works dated

05 December 2012 and the evidence of Mr Malebye, the then Acting
Director-General and Mr Rambau, the Security Manager of the DPW, Messrs
Malebye and Rambau visited the President's private residence on 19 May
2009 to make general observations on what was required in terms of a
security upgrade of the premises, to ensure adequate protection of the
President and his immediate family.

6.3.2. The professional services team of the Durban Regional Office of the DPW

(the Regional Office) was briefed on the observations made. This team,
consisting of an architect, quantity surveyor, civil, structural, mechanical and
electrical engineers then visited the site on 21 May 2009 to conduct a more
detailed scoping exercise on the immediate security measures that had to be
taken.

6.3.

The First Steps Taken to Initiate the Upgrading of the Security at the

President's Private Residence

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6.4.

The Initial Requirements of the DOD and the SAPS

6.4.1. The Office of the Surgeon-General of the DOD prepared a list of its

requirements in respect of a health facility for the President and his
immediate family, as well as staff accommodation, offices and associated
space required at the President's private residence, amounting to floor space
of 239m 2 . These requirements were contained in a document entitled:
"MILITARY HEALTH SUPPORT TO THE PRESIDENT" which was submitted
to the Acting Director-General of the DPW, in a letter addressed to him on 22
May 2009. Mr J Rindel indicated during the investigation that this document
was never provided to him.

6.4.2. Representatives of the SAPS, led by Brigadier Adendorff, visited the site of

the President's private residence on 28 May 2009 and conducted a security
evaluation in respect of the premises (as it was at the time), which was
recorded in a Security Evaluation Report and presented to the DPW Regional
Office for implementation of the proposed security measures.

6.5.1 . According to the evidence of Mr K Khanyile, former Regional Manager of the
DPW Regional Office and Mr Rindel, Mr Malebye, visited the Regional Office
again in July 2009, to officially introduce the Nkandla Project to the officials
that would be involved.

6.5.2. The Head of Projects in the Regional Office then appointed Mr S Mahadeo

as the Project Manager of the Nkandla Project, in August 2009. The latter
indicated in his evidence during the investigation that although the project
was registered in the Region, it was primarily driven from the DPW Head
Office.

6.5.

Getting the Project Started

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6.5.3. On 4 August 2009, an inter-departmental meeting in connection with the

Nkandla Project was held at the Regional Office, where the additional
requirements of the South African Medical Health Services (SAMHS) were
discussed. These additional requirements, as per the discussions held at the
meeting, were confirmed in writing in a letter from the former Surgeon
General, Lt Gen V Ramlakan addressed to the Acting Director of DPW on 7
August 2009, and related mainly to staff accommodation, including parking.

6.5.4. The Officer Commanding of the South African Air Force Base in Durban

submitted its requirements in respect of the safe landing of helicopters at the
President's private residence in a letter to the DPW, dated 5 August 2009,
which included the removal of obstructions and the provision of crew facilities
for adequate rest, relaxation and nutrition, to comply with international safety
regulations.

6.5.5. According to the former Chief Financial Officer, Ms Motsisi and Mr Khanyile

of the DPW interviewed during the investigation, the DPWs internal

arrangements provided that funding for the installation of the security

measures had to be approved by the Planned Maintenance Budget
Committee of the DPW (PMBC).

6.5.6. On 6 August 2009, the Director: PPM: Prestige of the DPW submitted an
Internal Memorandum to the Chairperson of the PMBC, requesting approval
of the amount of R27 893 067 for the Nkandla Project. This request was
approved.

6.5.7. Ms S Subban, the then Acting Deputy Director-General of the DPW and a
member of the PMBC, made the following comment on the approval
document, on 7 August 2009:

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"Due to urgent nature of service -service must be proceed (sic) and funds will
be made available periodically, as and when savings materialize from
prestige/DPW budget. "

6.5.8. According to the evidence of Mr M Makhanya, who was the architect
appointed by the President in his private capacity for the design of the three
new houses on the premises and who was later appointed as the Principal
Agent of the Nkandla Project by the DPW, the DPW and the SAPS held a
meeting on site with the President, on 12 August 2009.

6.5.9. The purpose of this meeting was to inform the President of the security
measures that would be installed at his three new dwellings. It was also
attended by the then Minister of Public Works, Mr G Doidge.

6.5.10. On 18 August 2009, Ms Subban issued a Procurement Instruction to the
Regional Manager stating, inter alia, the following:

"In order to comply with the provisions of the Ministerial Handbook, the
Department of Public Works has the responsibility of providing security
measures at the residential accommodation of all members of the Executive
of the Government of South Africa.

In giving effect to this responsibility, a project was initiated to provide security
measures at the private residence of the newly elected President of South
Africa, in Inkandla, district of Eshowe, Kwazulu Natal.

In consultation with SAPS, SANDF and NIA, the Professional Services
component of the Durban Regional office compiled a draft scope of works
and cost estimate for the provision of the security measures, based upon

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which approval was obtained from the Planned Maintenance Bid Committee
(sic) to implement the execution of the service.

You are requested to procure the services of suitably qualified specialist
service providers to do the planning, design and construction of the project in
compliance with the reguirements of the SAPS, SANDF and NIA.

The estimated cost of the project amounts to R27 893 067.00 inclusive of
VAT, for construction costs and professional fees, for anticipated expenditure
during the current (2009/10) financial year.

Funding for this project will be made available from the Capital Works
Baseline allocation of the Department of Public Works." (emphases added)

6.5.11. Mr Makhanya indicated during the investigation that a meeting was held at

the DPW Regional Office on 20 August 2009 in Durban, attended by all the
key role players in the Nkandla Project. Minenhle Makhanya Architects was
requested to make a presentation on the design of the three new houses.
The discussion related to the synchronizing of the DPW project with the
private construction.

6.5.12. Mr Makhanya confirmed during the investigation that the construction of the
President's three new private dwellings commenced on 24 August 2009.

6.6.1. Several of the DPW officials interviewed during the investigation stated that
Mr Malebye advised in September 2009 that the President preferred that the
team of people already employed on the site, should be appointed for the
Nkandla Project. He accordingly instructed the Regional Office to appoint the

6.6.

The Appointment of Consultants for the Project

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consultants and contractor appointed by the President for the construction of
the three private residences, for the DPW project. I could however find no
reference to this request by Mr Malebye in the documents perused during the
investigation.

6.6.2. The Nkandla Project was to be implemented in three phases:

6.6.2.2 The First Phase was the emergency works, which consisted mainly of the
most essential items that had to be installed in order to ensure a minimum
level of security;

6.6.2.3 The Second and Third Phases were regarded as low security, but necessary
for the safe keeping of the President and his family.

6.6.3. On 4 September 2009, the Acting Director: Projects of the Durban Regional
Office of the DPW submitted an Internal Memorandum to the Regional Bid
Adjudication Committee (RBAC) requesting approval for the appointment of
Minenhle Makhanya Architects and R&G Consultants (quantity surveyors) for
professional assistance in the Nkandla Project. The motivation for the
request was as follows:

"The instructed scope of works must be integrated with the future building
plans of the owner of the property. The future plans include substantial
changes. The changes are currently in design by the following consulting
team as appointed by the owner:

• Architect: Minenhle Makhanya Architects

• Quantity Surveyor: R&G Consultants

• Engineers.

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The security measures that the Department will be responsible for will be
designed in-house (Departmental project team). This is in line with verbal
instructions from the Acting DG in order to ensure better security-and cost
control over this project.

The appointment of the architect and quantity surveyor is however essential
in order to ensure complete integration between the two design
teams."(emphasis added)

6.6.4. The Minutes of the RBAC show that it approved the appointment of Minenhle
Makhanya Architects and R&G Consultants on 8 September 2009, in the
estimated amounts of R415 440 and R415 440, respectively.

6.6.5. On 10 September 2009, the Acting Director: Projects of the DPW

approached Mr Malebye, via the then Acting Regional Manager, with an
Internal Memorandum requesting his approval for the appointment of
professional consultants to design, provide tender documents and supervise
the construction of relevant support buildings and the installation of security
measures at the Nkandla Project. Added to the list of private consultants that
was approved by the RBAC, referred to above, was the name of Ibhongo
Consulting Engineers.

6.6.6. It was again emphasized that the President had appointed the consultants in
his private capacity, more than two years earlier. The Internal Memorandum
further stated that:

"It is essential that the same professionals be appointed for this project for
the following reasons:

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The appointment of the team is essential in order to ensure complete
integration between the two separate projects (installation of security
measures and owner's own upgrading project).
It is not advisable to utilize the Departmental Professionals, as they do
not carry professional indemnity.

This is a fast track project and it is essential that one team work on all
aspects of the project.' '(emphasis added)

6.6.7. Mr Malebye approved the request on the same day (10 September 2009).

The estimated cost of the professional fees was calculated at 18.5% of the
estimated cost of the Nkandla Project (R27 million at the time) and amounted
to R4 995 000.

6.7. Approval of Parts of the Concept Design

6.7.2. Correspondence between Lt. Gen. Ramlakan and the Chief Architect of the
DPW Professional Services dated 16 September 2009, indicate that they met
on 22 September 2009 to discuss the concept design of aspects of the
Nkandla Project. The Lt. Gen. Ramlakan approved the drawings of the
military clinic, subject to further requirements. A copy of the drawings
indicates that he also approved other designs relating to the crew pavilion for
helicopter pilots, the safe haven and communication systems, subject to
further additions.

6.8. First Cost Estimate and List of Contractors Prepared by R & G
Consultants

6.8.2. According to Mr Makhanya, it became obvious soon after his appointment
that the DPW did not take into account the full scope of the security

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requirements of the SAPS in its initial evaluation of what needed to be done.
These requirements were also still in a process of further development. The
final details thereof were not available at that stage.

6.8.3. On the basis of the information in respect of the security and medical care
requirements that were submitted to the DPW by the DOD and the SAPS by
September 2009, R&G Consultants prepared a detailed cost estimation
document in respect of the Nkandla Project, which concluded that the
estimated cost would amount to R47 323 102. This document was addressed
to the Acting Director-General, who was Mr Malebye.

6.9. The Delegation of Authority to the RBAC and the Selection of
Contractors

6.9.2. A Procurement Certificate for the Nkandla Project was signed by several
officials of the Regional Office of the DPW on 5 and 6 October 2009.

6.9.3. Mr Danhiram, the Deputy Director: Key Account Management noted on the
document that "No norms have been received". During the investigation, he
explained in this regard that the Procurement Certificate was the start of the
procurement process when the estimates based on the norms submitted by
the client department are determined before a tender process commenced.
In this case there were no such norms provided.

6.9.4. Mr Mahadeo, the Project Manager at the time, certified on the document that
the project as designed and documented was within the approved space and
cost norms. On his part Mr Nadu, the Assistant Director: Key Account
Management noted that the necessity of the project had been confirmed and
that funds were available.

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6.9.5. The Quantity Surveyors appointed by the DPW for the Nkandla Project, R&G
Consultants, presented a list of proposed contractors to Mr Mahadeo by
email on 8 October 2009. R&G Consultants explained the basis for the
selection of the contractors as follows:

"Further to our meeting of even date and acting on instruction from the
Principal Agent (Minenhle Makhanya Architects), we submit a list of proposed
contractors who are to be invited to tender on this project. Please note as
indicated at yesterday's meeting with the Minister and Director-General of
Public Works at Tshwane, the basis of our nomination is that:

1. These contractors are registered with the CIDB and most of them have
the necessary grading 6GB PE.

2. They are currently doing in (sic) the area and therefore understand the
local communities.

3. We, as a professional team, have screened them, and we are satisfied
that they can deliver the goods." (emphases added)

6.9.6. On 9 October 2009, Mr Khanyile, the former Regional Manager of the DPW
Regional Office, submitted a request by means of an Internal Memorandum
to Mr Malebye, to approve a delegation that would allow the RBAC to
approve a procurement strategy to the value of more than R20 million. It was
stated in the Internal Memorandum that:

" The DG held a meeting with the project team, including the PM (Project
Manager) on 5 October 2009. In the meeting it was confirmed that:

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• The nominated procedure will be utilized. Contractors in larger northern
KZN should be targeted in order to benefit from the works.

• The private QS identify firms for general building, civil engineering
works and electrical installations. This would be utilized for a nominated
procedure.

• The RBAC must approve the procurement strategy above R 20
000,000.00.

In order for the RBAC to complete its mandate, the following delegations is
(sic) requested to be given to the committee specifically for this project in lieu
of the standard delegations:

The required delegations are as follows:

1. The responsibility of selecting contractors vests with SCM in the
regional office. It is requested that DG confirms that this office may
deviate from this responsibility in that the list as provided by the private
QS may be used.

2. The RBAC currently only has the delegation to approve any
procurement strategy or tender below a limit of R20 OOO OOO.OO. It is
requested that for this project only this delegation should be
increased to above R 20 OOO OOO.

This will result in this office gaining complete control over the
procurement process and that any communication with the SNBAC
(Special National Bid Adjudication Committee) will not delay the project.

If this request is denied, the RBAC will still forward the procurement
strategy to the SNBAC by 9 October 2009, but no guarantee can be
given on the expected date of approval."

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3. The list of names for the nominated tender for NIA clearance had been
forwarded to HO for assistance in fast tracking." (emphases added)

6.9.7. Mr Khanyile explained during the investigation that he requested the
delegation because Mr Malebye impressed upon him that the Nkandla
Project had to be fast tracked. He advised that he also knew from experience
that to have involved the SNBAC could have delayed implementation.

6.9.8. On the basis of this Internal Memorandum, Mr Malebye approved the
following recommendations on 9 October 2009:

" 1. The list as provided by the private QS be regarded as acceptable (only
CIDB registered contractors);

2. The delegation to approve the procurement strategy above R 20 000
000.

3. Head of Security Services assist in fast tracking the NIA clearance on
the nominated contractors."

6.1 0. The Accommodation Needs Submitted by the SAPS

6.10.2. According to the records of the DPW and a response to my enquiries by the
Minister of Public Works, dated 5 December 2012, the DPW and the SAPS
Divisions: Supply Chain Management and Protection and Security Service
met in connection with the Nkandla Project on 12 October 2009. On 15
October 2009, the SAPS Divisional Commissioner: Supply Chain
Management submitted to the Acting Director-General of the DPW "a

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certified needs assessment for accommodation to be constructed at the

residence of State President (sic) Zuma as well as applicable specifications. "

6.1 0.3. According to the certified needs assessment of the SAPS, it required:

6.1 0.3.1 1 three bedroom park home as interim accommodation

6.10.3.2 2 offices

6.10.3.3 2 guard houses

6.10.3.4 1 control room

6.10.3.5 8 bachelor flats

6.1 0.3.6 1 3 lock up garages; and

6.10.3.7 8 car ports.

6.10.4. The total estimated cost of the certified needs assessment of the SAPS
amounted to R1 1 405 004.47.

6.10.5. However, on 23 October 2009, SAPS Divisional Commissioner: Supply

Chain Management informed the Director-General of the DPW in writing that:

" By instruction of the State President, President Zuma the existing house at
Nkandla currently accommodates SAPS members, (sic) must be converted
as part of the President's household.

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To cater for the needs of the members currently accommodated in the house
as referred to above, additional bachelor flats need to be added to the needs
assessment previously provided to your department.' '(emphasis added)

6.10.6. The attached certified needs assessments almost doubled the number of
required bachelor flats, lock up garages and car ports. The cost estimate for
the revised needs assessment concomitantly increased to R13 260 827.63.

6.10.7. According to the evidence of Mr Khanyile, there was a need for
accommodation of the staff of the SAPS and the DOD looking after the safety
of the President as the nearest town, Eshowe, is about 47 km from the site
and no other accommodation was available for them in the area.

6.1 1 . Procurement Strategies Approved by RBAC

6.11.2. The Minutes of the RBAC meetings indicate that during October 2009 it
approved procurement strategies in respect of nominated procurement
procedures for electrical works, engineering and construction for the Nkandla
Project.

6.12. Project Manager Replaced

6.12.2. It was explained in the evidence of officials of the DPW Regional Office that
due to operational changes that occurred in the Regional Office of the DPW,
the original Project Manager, Mr Mahadeo, was replaced by Mr J Rindel, in
January 2010. Mr Rindel testified during the investigation that when he
visited the Nkandla Project site towards the end of January 2010, he
discovered that the construction of the President's three private residences
was well advanced. Due to the fact that the three new residences were not

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taken into account when the original security audit was conducted by the
SAPS, an updated security evaluation was required.

6.1 2.3. Mr Rindel was of the view that the scale of the proposed project was too big

for the Regional Office to handle on its own. The Regional Office does not
have a Prestige Unit dealing with projects under the Prestige Programme of
the DPW and has no policy or specific delegations from the DPW Head
Office on how to handle such a project.

6.12.4. At the time that he took over as the Project Manager, the Nkandla Project

was progressing slowly. Meetings with the consultants were only held every
two to three weeks. After the former Acting Director-General, Mr Malebye, left
the DPW at the end of March 2010, little guidance was provided to the DPW
Regional Office. The implementation of the project was accelerated when
Minister Doidge became personally involved and regular progress meetings
were held.

6.12.5. It was confirmed by Mr Rindel that the Nkandla Project comprised three

phases. Phase 1 consisted of the so called "emergency works" and was to
include a perimeter fence, access control buildings, all the infrastructure
upgrades for water, sewerage and electricity and the relocation of the tuck
shop. Space also had to be made for the two helipads.

6.1 3. The Second Cost Estimate

6.13.1. The second cost estimate prepared by R&G Consultants in February 2010,

shows that by that time they were provided with more detailed information on
the scope of works. The increase in staff accommodation, the helicopter crew
pavilion that was required as well as the increase in the size of the safe
haven and the bulk earth works caused the estimated costs of the Nkandla

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Project to increase from R47 323 1 02 to R80 836 249. The cost estimate was
also prepared for and addressed to the Acting Director-General, who was Mr
Malebye at the time.

6.14. The First Progress Meeting

6.14.1. The first Progress Meeting, in respect of which minutes were found during
the investigation, was held on 15 February 2010. It was chaired by Mr
Khanyile.

6.14.2. It was, inter alia, reported that Mr Rindel had made certain observations
about the security on the site during construction and concluded that due to
the fact that the construction of the private dwellings was well advanced, the
DPW had to expedite the implementation of security measures.

6.15. The Nominated Procurement Strategy for the Appointment of
Contractors for the Emergency Works

6.15.1. On 1 March 2010, Mr Rindel approached the RBAC with an Internal
Memorandum requesting the approval of a nominated procurement strategy
in respect of contractors for the emergency works that had to be performed
as part of the Nkandla Project. He motivated his request for the approval of
the nominated procurement strategy as follows:

" The use of the nominated process is the process that will achieve the most
speedy results when compared to other SCM processes. This is proven as
follows:

• Open process - This cannot be concluded, as the secret information
cannot be advertised openly.

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• P 're-qualification process - The process is expected to take up to 4
months, including the NIA clearance and screening processes. This is
much too long.

• Quotation process - same as Open process.

• Nominated process - This process empowers the State to select
contractors that had previously been NIA screened and approved, thus
allowing this office to immediately provide the approved contractors with
tender documents. It is thus proven that this be the preferred and
fastest method to procure the works.

The proposed nominated strategy shall be based on the following basis:

• Nominations were previously done for contractors nominated by the
Private Architect as instructed by the then acting DG, Mr S Malebye.
The contractors were nominated from northern KZN for the works to be
concluded. This strategy was thereafter changed to a pre -qualification
process.

• The profiles/details of the nominated contractors were handed over to
NIA for screening purposes. This was concluded and the Department is
in possession of the results.

• The criteria for the nomination of the contractors are as follows:

• The contractors must have passed the required NIA clearance.

• The contractors must be registered at the minimum CIDB grading, being
7GB, ICE or 6 GBPE, 6 CEPE or higher. "

6.15.2. According to Mr Rindel's memorandum, the following contractors qualified in
terms of the requirements of the nomination process and were recommended
for appointment:

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6.1 5.2.1 Gwabini Development Contractors.

6.1 5.2.2 Zethembe Maintenance and General Services CC.

6.1 5.2.3 Bonelena Construction Enterprize.

6.1 5.2.4 Makhathini Projects CC.

6.15.3. The Minutes of the RBAC indicate that it approved the nominated
procurement strategy as requested by Mr Rindel, on 2 March 2010.

6.16. The Negotiated Procurement Strategy for Selected Works During Phase
One of the Nkandla Project

6.1 6.1 . Mr Rindel submitted a further Internal Memorandum to the RBAC on 1 March
2010, requesting it to approve the procurement of selected works on the
Nkandla Project by means of a negotiated procurement process. The
following extract of that memorandum is of particular significance to the
matters investigated:

"BACKGROUND

The scope of the works on the complete project consists of the following:

• New parameter security fence, complete with intruder detection;

• New SAPS guard rooms

• New hospital

• New helicopter landing pads

• Upgrading of water supply

• Upgrading of sewerage disposal

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• Upgrading of firefighting installations.

The Owner (sic) of the property had appointed a contractor, Messrs
Moneymine Investments to construct new accommodation at the site. The
current status of that project is that the contractor is on site and construction
is 15% completed.

The State has the obligation to include the security measures in the existing
and new accommodation. This was confirmed by SAPS in a meeting on site
on 26 January 2010.

The scope of the works as indicated above, intrudes on the building works of
the contractor, Messrs Moneymine Investments, as the security needs to be
extended into the buildings that is currently being constructed.

It is essential that Messrs Moneymine construction (sic) be appointed under
the negotiated procedure to eliminate the following risks:

• The above works cannot be done by any other contractor (appointed by
open/nominated procedure) as all guarantees that the current contractor
has/will provide, will be null and void.

• The construction is in progress and the contractor is on program. The
works that is (sic) included here is (sic) already delaying the contractor
as 1 building is already at window height and the windows must be
installed. This action cannot wait.

• The contractor is security cleared by NIA and is trusted by the Owner of
the Property (sic).

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6.16.2.

6.17.
6.17.1.

6.17.2.
6.17.3.

It is thus essential that the same contractor, Messrs Moneymine Investments,
be appointed to complete the i//or/<s."(emphasis added)

The memorandum proposed a negotiated strategy for the appointment of
Moneymine Investments (Moneymine), which was approved.

The SAPS Complains About the Slow Progress

On 23 March 2010 a project Progress Meeting was held. The Minutes of this
meeting indicate that the SAPS complained about lack of progress made by
the DPW. The "Roll-Out Plan" agreed on was recorded as:

"The Public Works Regional Bid Committee had approved the
implementation of the entire project through a public tender process and
allowing a few negotiated sections that affected the principal's residence."

Mr Rindel further reported that the expression of interest submissions for the
entire project was due on 24 March 2010. The envisaged process at the time
was a pre-qualification tender, followed by "NIA screening of prospective
tenderers. "

As far as works directly related to the houses of the President were
concerned, a negotiated process with the contractors on the site was decided
upon. Emergency works were to be implemented by "previously screened
organisations. "

In this regard, Mr Rindel explained that the building contractor that was
already on the site and involved with the President's private buildings was
used for the works relating to those buildings for the sake of convenience,
expedience and integration of the DPW works. As far as the other emergency

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works were concerned, he proposed that four contractors that were already
cleared by NIA and that were involved in the Kings House Project, be
approached for competitive quotes.

6.18. The Declaration of the President's Private Residence as a National Key
Point

6.18.1. According to a Declaration Certificate provided to me by the Ministers of
Public Works and Police, the President's private residence was declared a
National Key Point by the Minister of Police, in terms of the National Key
Points Act, 1 980, on 8 April 201 0.

6.19. The President Complains About the Slow Progress Made with the
Nkandla Project

6.19.1. Mr Rindel indicated in his evidence during the investigation that much
pressure was applied on the officials involved in the implementation of the
Nkandla Project from the DPW Head Office by May/June 2010, due to the
fact that the President had complained about the slow progress made and
the negative impact that it had on the finalization of the construction of his
private dwellings.

6.19.2. At some point, according to him, the President called some of the SAPS
officials involved to his house on the site to discuss the matter as he felt that
the construction works were causing chaos on his property.

6.19.3. On 2 June 2010, Mr Rindel submitted a progress report to the Head of
Prestige of the DPW. As far as the norms required for the Nkandla Project
were concerned, the progress report stated that:

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"Defence: No norms were received. However, the architects have drawn
the required facilities as indicated by the POD Generals, and this was
approved by their Top Management and signed off. These include POD
Surgeon General (New clinic) and Air Force (New helicopter landing pads).

SAPS: This office is in possession of the proposed norms, but is awaiting the
final approval.

Site Clearance: The Site Clearance of this project is not clear and had not
been concluded as far as I know. The ownership of the site is in guestion,
and it is believed that it is based on agreements between the Principal and
the Local Nkhosi (sic)." (emphasis added)

6.19.4. The progress report further indicated that no funding was allocated for the
project, which resorted under the Capital Works budget allocation of the
DPW. The required funding was stated as follows:

Contractor

R 30,000,000

R 36,165,484

Consultant

R 8,920,896

R 2,016,581

Total

R 38,920,896

R 38,182,065

Figure 2: Required funding as stated by Mr Rindel in the progress report to DPW Head of Prestige

6.19.5. It was recommended that the stipulated funding be obtained for the Nkandla
Project.

6.19.6. The progress report referred to above was converted into an Internal
Memorandum submitted by Mr Khanyile to Mr S Vukela, who by then had
replaced Mr Malebye as the Acting Director-General of the DPW, on 10 June
2010, recommending the approval for the Nkandla Project for the 2010/2011

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financial year of an amount of R38 920 896. Mr Vukela approved the funding
on 1 1 June 2010, noting the following:

"Funding must be transferred to budget to facilitate Pf

6.20. The Shifting of Funds to Pay for the Project

6.20.1. On 14 June 2010, the Director: PPM of the DPW approached the
Chairperson of the PMBC with a written request for the approval of the
shifting of funds from the Inner City Regeneration Programme of the DPW
and the DPW Dolomite Programme "to fund a Prestige capital project WCS
047455: Installation of Security Measures & Related at the private residence
of the State President in Inkandla, KwaZulu-Natal."

6.20.2. It was stated in the Internal Memorandum that there was no funding for the
Nkandla Project and that the Acting Director-General had approved that R40
million be made available from the Capital Works Budget. It also indicated
that the Deputy Director-General was instructed to source funds urgently.

6.20.3. The PMBC approved the request for the shifting of funds on 30 June 201 0.

6.20.4. On 12 July 2010, the Chief Director: PPM of the DPW submitted an Internal
Memorandum to the Chairperson of the Central Budget Committee of the
Department in respect of the reallocation of the Capital Works budget for the
2010/11 financial year. The motivation for requesting the Committee to
approve the reallocation was as follows:

"Due to high cash flows the regional offices were requested to update the
system by 1 7 May 20 1 0.

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— i-v

Capital Works budget was overcommitted. It was however noticed that RKTP
and Dolomite programmes were under spending as the results funds (sic)
were transferred from the said programmes to cover Prestige urgent projects.
In addition BCOCC has also identified savings from their allocation and
amount of R 18m will be utilized to fund security measures for Prestige and
R 10m for appointment of consultants for DPW for the construction of regional
offices. In order to compensate for the shortfall Prestige funds had to be
sourced from BCOCC as the request for security measures are critical and of
high importance.

The Prestige original allocation was R336m and has since increased to
R376m. The allocation on all the above services has been done in order to
cover critical projects for Prestige and DPW."

6.20.5. The requested reallocation of the Capital Works budget for 2010/11 was
approved by the DPW Central Budget Committee on 1 3 July 201 0.

6.21 . Cost Estimate No 4

6.21.1. At a Progress Meeting held on 16 July 2010, chaired by Mr Rindel, issues
such as the utilization of and funding for the Military Clinic, designs for
security at the SAPS Control Room, the construction of a road to the helipad,
and additional parking, were raised. It was also minuted that the SAPS
confirmed that it required 20 bachelor flats, consisting of 10 buildings.

6.21.2. On 28 July 2010, C A Du Toit Consulting Engineers that was appointed as
the security consultants for the Nkandla Project submitted a preliminary
report on the security measures that were required, which had to be

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considered for implementation in conjunction with the measures stipulated by
the SAPS Security Evaluation Reports.

6.21.3. R&G Consultants presented the DPW with its Cost Estimate No 4 in July
2010. It amounted to R130 604 267.02. The main reasons for the increase in
the cost estimation of the Nkandla Project were recorded as the redistribution
of items to correct building installations, further increase in the earth and
electrical works, the installation of sprinklers, an increase in security
measures based on the assessment of the security consultant and
communication systems.

6.21.4. Mr Rindel explained during the investigation that from January 2010 to June
2010, the focus of the Nkandla Project was only on Phase 1, i.e. the
emergency works. From June 2010, the design of Phase 2 started in earnest,
which is why the cost of the project started to escalate rapidly. Mr
Makhanya's initial designs were not detailed and costed as such. However,
once the details started to be added, it impacted on the cost of the project.

6.22. The Utilization of the Military Clinic, Discussions with the President and
Appointment of a Landscape Architect

6.22.1 . The Minutes of the Progress Meeting held on 30 July 2010 recorded that Mr
Makhanya confirmed that the Military Clinic would not be utilized for public
use, "but for military use only." Further modifications to, inter alia, the roads,
escape hatches, perimeter fencing were also discussed. The Civil Engineer
was requested to pay attention to the issue of storm water drainage and
excavations.

6.22.2. It was also recorded that Mr Makhanya would discuss the road surface
required for the driving of tractors with "the principal" {the President).

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6.22.3.

6.22.4.

6.22.5.

6.22.5.1

6.22.5.2

6.22.5.3
6.22.5.4
6.22.6.

The Mechanical Engineer was requested to make provision for fresh air
supply to all the buildings and the construction of an additional guard house
at the cattle gate was requested. Ms Pasley, the Chief Quantity Surveyor of
the DPW was recorded as having stated that:

"... firm financial control must be in place and consultants must ensure strict
disciplines for financial measures."

Mr Rindel approached the RBAC on 16 August 2010 with a request that the
appointment of a Landscape Architect, via the Principal Agent (Mr
Makhanya) is approved. He indicated during the investigation that his request
was the result of instructions received from the DPW architects at head
office.

According to his Internal Memorandum, the scope of the landscaping works
fell outside that of the appointed architect and included the following:

Generation and submission of an Environmental Impact Assessment
required for the new sewerage package plant;

Design and documentation for all ground levels, banks, positions of retaining
walls and storm water flows;

Levelling of grounds for security fencing; and

Designing measures aimed at security, visibility and privacy in specific areas.

The estimated cost of the landscaping works was presented as R8.3 million
and the associated professional fees as R1 .5 million.

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6.22.7. Based on a nominated procurement process that was followed, Mr Rindel
recommended that the RBAC approve the appointment of the firm Uys and
White Architects to do the design of the proposed landscaping.

6.22.8. The Minutes of the RBAC show that it approved Mr Rindel's recommendation

on 17 August 2010, but noted that it was subject to the condition that:
"landscaping forms part of final scope for security measures."

6.23. Cost Estimate No 5

6.23.1. On 16 August 2010, R&G Consultants submitted Cost Estimate No 5 to the
Acting Director-General of the DPW. It indicated that the total estimated cost
of the Nkandla Project increased by a further 11% from the previous cost
estimate, to R145 086 964. The hiked cost was attributed to expansion in the
scope of work, which involved:

6.23.1.1 Additional blocks of staff houses;

6.23.1 .2 An expanded Safe Haven;

6.23.1 .3 Additional Guard House;

6.23.1.4 Additional SAPS Garages;

6.23.1 .5 Additional measures around the fence; and

6.23.1.6 Landscape Architect and Environmental Consultant fees (Based on

assumption that the value of their work will be around R3 mil).

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6.24. Progress Reported on the Landscaping

6.24.1. A Progress Meeting of the Project Team was held on 19 August 2010. The
Minutes of the meeting state that Mr Rindel confirmed that a Landscape
Architect was appointed.

6.24.2. After discussions on the progress made in respect of a number of items, Mr
Rindel suggested that Mr Makhanya meet with the President, "for signing off
of documents." He indicated during the investigation that both Mr Makhanya
and the appointed Landscape Architect were tasked at the meeting to obtain
approval of the landscape design from the President. The officials of the
Regional Office were not allowed to be part of that process. No further
evidence was provided indicating that the President was indeed consulted in
this regard.

6.24.3. Mr J Crafford, the Director: Architectural Services of the DPW approached Mr
R Samuel, former Deputy Director-General of the DPW that was involved in
the management of the Nkandla Project, on 20 August 2010, providing him
with a progress report in writing. He stated the following as far as the planned
landscaping was concerned:

"The appointment of the landscape architect (based in Durban) was only
made during the course of the present week. Briefing and further discussions
as well as a site visit could therefore only have been undertaken during the
latter part of this week. The landscape architect fully comprehends the nature
of her work, i.e. to reinstate the veld where interventions occur, to deal with
interventions in the most sensitive terms, (large volumes of rainwater runoff
generated by roads and roofs, etc.) the possible need for an El A process, the
planting of trees, the care of the dry farmland as well as the vegetable
garden, the finding of alternative water sources, the laying out of pathways,

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stairs and ramps, etc. attention to gardening and so on will only follow last on
the list, although an outdoor living area common to all the houses has been
identified and will be designed."

6.25. Concerns raised about the budget

6.25.1. It was noted that Mr Crafford also raised his concerns on 20 August 2010
about the cost of the Nkandla Project with Mr Samuel, as follows:

"An item of major concern is the budget, which has assumed gigantic
proportions, given the fact that:

• A more comprehensive overview has only now become apparent;

• The project is quite extensive, given the number of buildings to be
erected, and

• Given the very humble beginnings of the project, nothing short of full
township establishment now required with all the civil services yet to be
put in place, inclusive of roads, storm water, potable water, telephone
and electricity, standby power, security fencing, etc., and the list is
growing , and

• Compliance with statutory requirements with reference to interventions
made in the landscape has yet to be costed and included in the budget. "
(emphasis added)

6.25.2. According to Mr Rindel, it was only at this time that the DPW head office
became aware of the full scope of the works as proposed by Mr Makhanya
and the other consultants.

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111 l.'K.II

6.26. Emergency Progress Meeting and the Appointment of a Private Project
Manager

6.26.1. An "Emergency Progress Meeting" was held on the site of the Nkandla
Project on 6 September 201 0.

6.26.2. According to the Minutes of the meeting, the former Minister of Public Works,
Mr G Doidge, and Mr Samuel, were in attendance. After the Minister was
introduced to the Project Team by the Regional Manager, Mr Doidge chaired
the meeting.

6.26.3. The progress made with items such as the installation of the bullet resistant
glass and the perimeter fence was raised. Additions, including the
improvement of the water supply, were also discussed. It was recorded that
Minister Doidge would schedule two further visits to the site.

6.26.4. The Project Team was requested to fully commit to the project. It was evident
from the discussions recorded that there was an urgency to complete at least
the first phase of the project by the end of November 201 0.

6.26.5. On 14 September 2010, Mr Rindel chaired a Coordination Meeting relating to
the Nkandla Project. It was recorded in the Minutes of the meeting that he
confirmed that a private Project Manager was to be appointed by 24
September 2010, "to accelerate works on site and to assist with NDPW
critical outstanding issues." Mr Rindel indicated that the appointment of a
private Project Manager was based on an instruction from the DPW Deputy
Director-General, Mr Samuel.

6.26.6. Other issues, such as the redesign of roads, the water treatment plant, air
conditioning of the houses, landscaping, the installation of the bullet resistant

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6.26.7.
6.26.8.

6.26.9.

6.26.10.

6.27.
6.27.1.

6.27.2.

glass, lights for the helipads, earth works at the cattle kraal, safe heaven,
electrical supply and lifts were discussed.

On 16 September 2010 another Emergency Progress Meeting was held on
the site. According to the Minutes, Mr Rindel chaired the meeting and Mr
Khanyile tendered an apology on behalf of Minister Doidge.

The appointment of the private Project Manager by means of a negotiated
procurement process was, according to its Minutes, approved by the RBAC
on 17 September 2010. The estimated cost of the appointment was R2.9
million.

At a Progress Meeting held on 17 September 2010, the appointment of the
Private Project manager was also confirmed. It was noted in the Minutes that
the primary objective of the private Project Manager was to "get works on site
accelerated. "

The issue of whether or not the Military Clinic would be used by people of the
village was again raised by the SAPS with the request that a decision is
taken.

Cost Estimate No 6

On 17 September 2010, R&G Consultants presented the Director-General of
the DPW with yet another cost estimate on the project (Cost Estimate No 6).

It represented a further 33% increase to R193 533 873. This time the extras
to the previous scope of works responsible for the increase included:

(a) An adjustment to the Safe Haven.

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(b) Additions in all specialist services.

(d) Availability of Plant Room Designs.

(e) Additions to Communications.

6.28. Urgency to Complete Works by 30 November 201

6.28.1. The next Emergency Progress Meeting was held with the Project Team on
the site and chaired by Minister Doidge, on 23 September 2010.

6.28.2. According to the Minutes of the meeting, the urgency of completing the

installation of the bullet resistant glass, the construction of the fences and the
accommodation of the SAPS officials were attended to. The progress made
with the construction of the helipads and landscaping were also discussed.

6.28.3. Minister Doidge stressed again that as much as possible of the works had to
be completed by 30 November 2010.

6.29. The Second SAPS Security Evaluation

6.29.1 . The Office of the Divisional Commissioner: Protection and Security Service of

the South African Police Service submitted a further security evaluation to the
Director-General of the DPW on 25 September 2010. It contained details of
the security measures required by the SAPS in addition to what was
presented to the DPW in the report on the security evaluation that was
conducted on 28 May 2009.

6.29.2. According to Mr Rindel's evidence, the "new" security evaluation by the
SAPS only focused on the security measures that were required. It was

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based on a performance specification. The professional consultants had to
determine the exact scope, specification and cost of the works for the
purposes of procurement.

6.30. Progress Reported in October 2010

6.30.1. The Durban Regional Office prepared a comprehensive progress report on
the Nkandla Project on 10 October 2010.

6.30.2. A Progress Meeting was held on the site on 12 October 2010, chaired by
Minister Doidge.

6.31 . Mr Doidge Replaced as Minister of Public Works

6.31.1. It is common cause that Mr Doidge was removed from his position as the
Minister of Public Works on 31 October 2010 and replaced by former Minister
G Mahlangu-Nkabinde.

6.32. Minister Mahlangu-Nkabinde Reports to the President on the Progress
Made with the Nkandla Project

6.32.1. On 5 November 2010, Minister Mahlangu-Nkabinde addressed a letter to
President Zuma providing him with a detailed progress report on the following
activities relating to the project:

6.32.1.1 Cattle culvert

6.32.1.2 Perimeter fence

6.32.1 .3 Inner high security fence

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6.32.1 .4 Guard House, Tuck Shop, Refuse and electrical rooms

6.32.1.5 Electrical supply

6.32.1.6 Sewer treatment plant

6.32.1 .7 Relocation of families

6.32.1.8 Upgrade of water supply

6.32.1.9 Helipad

6.32.1 .1 Excavation for clinic

6.32.1 .1 1 Entrance by-pass

6.32.1 .1 2 Services to park homes

6.32.1.13 Entrance road

6.32.1 .14 A security installation relating to the safe Haven

6.32.1.15 Safe haven

6.32.1 .1 6 Bullet Proof Glazing

6.32.1.17 High Impact Glazing.
6.32.2. She further reported that:

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" Taking the above report into consideration I am pleased to report that all the
work for which my department is responsible will be completed by the
deadline of the 30 November 2010 as per the commitment given to you by
my predecessor. I have also taken the liberty of attaching hereto a progress
report as updated on the 5 November 2010 detailing the various activities,
the percentage completed per activity and comments for your information."

6.32.3. Attached to Minister Mahlangu-Nkabinde's letter was an Internal

Memorandum addressed to her by the Director-General of the DPW (Mr S
Dongwana), signed by him on 5 November 2010, setting out the background
of the project and including a detailed progress report prepared by the private
Project Manager appointed by the DPW, Ramcon Project Managers.

6.32.4. Mr Samuel (Deputy Director-General) chaired the subsequent Progress

Meeting held on 9 November 2010 and reported, according to the Minutes
and his evidence during the investigation, that the President was informed of
the progress made with the project and that he was satisfied.

6.33. Cost Estimate No 7

6.33.1. Cost Estimate No 7 prepared by R&G Consultants was submitted to the
Director-General of the DPW on 9 November 2010.

6.33.2. The increase in the cost estimate from R193 533 873 to R196 864 037 was

ascribed by them to additional park homes, an additional five staff houses,
laundry facilities, design changes and the installation of solar power to staff
houses.

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6.34. Further Concerns Raised About the Cost of the Project and the
Consideration of Cost Apportionment

6.34.1. The Ms G Pasley, Chief Quantity Surveyor of the DPW raised her concerns
about the escalation of the costs of the Nkandla Project in an email message
sent to Mr Rindel, on 3 December 2010. She stated, inter alia, that:

"The scope of work and estimated costs have increased considerably over
the past four months and continue to change which has given rise to further
cost increases as can be seen from the budget reports already submitted by
the consultant team and which are currently in the process of being revised
again. The estimated costs have almost doubled over this period and it is
essential that the parameters in respect of the scope of work and the budget
are established and confirmed. Information pertaining to the exact
apportionment of work and costs is critical in order that a detailed cost
analysis can be done by the consultant Quantity Surveyors within the
confines of the budget." (emphasis added)

6.34.2. By 10 November 2010, the Regional Office started to prepare a document

itemizing the scope of work and identifying what the DPW was responsible
for and which items could be regarded as "private" i.e. for the account of the
President.

6.35. Feedback from Further Discussions with the President

6.35.1. One of the issues discussed at the Progress Meeting held on 16 November

2010 was the relocation of certain households as part of the project.
According to the Minutes of the meeting, Mr Makhanya indicated that he was
advised by the President that the households to be relocated 7s waiting for a
family member to arrive before relocation can take place." Mr Khanyile was

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requested to inform the President in writing of the circumstances relating to
the relocation.

6.35.2. At the progress meeting held on 23 November 2010, it was recorded that the
President had requested to be informed about the delay in their relocation
from the site.

6.36. Enter Deputy Minister Bogopane-Zulu

6.36.1 . Deputy Minister Bogopane-Zulu was introduced to the Nkandla Project Team
at a Progress Meeting held on 30 November 2010.

6.36.2. The Minutes of the meeting show that she immediately became involved in
the discussions regarding the progress made in respect of several elements
of the Nkandla Project.

6.36.3. She also indicated to the meeting that she had discussions regarding the
Nkandla Project with the President and that she would have further
discussions with him regarding issues, such as the relocation of the affected
households.

6.36.4. The next Progress Meeting was held on 6 December 2010 and chaired by
Deputy Minister Bogopane-Zulu. According to the Minutes of the meeting,
she, inter alia, requested the contractors to improve the security on the site,
offered her assistance and provided guidance in respect of expediting the
project.

6.36.5. It was also minuted that she stated that the President had requested that no
new contractors be permitted to work on the site in Phase 2 of the Project.

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6.37. Cost Estimate No 8

6.37.1. R&G Consultants submitted Cost Estimate No 8 to the Director-General of
the DPW on 8 December 2010. It indicated a 13,96% increase, stating that
the following had to be added:

6.37.1 .1 The 5 additional staff residential houses;

6.37.1 .2 Additions to the relocation of households;

6.37.1 .3 A Booster Pump Station;

6.37.1 .4 Availability of certain values for direct contracts;

6.37.1 .5 Inclusion of contractor rates; and

6.37.1.6 Design changes to the SAPS, Pavilion and garage buildings that had not
been finalized.

6.37.2. The estimated increased from R196 864 037 to R224 344 542, as set out in

the following graph:

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Cost Estimates

1/0/1900

3£

"Z 1/0/1900

| 1/0/1900
ro

13 1/0/1900
ro

| 1/0/1900
</i

1/0/1900

□ Estimated Amount (R)

R27,893,

R47,323,

R80,836

U30,60^

={145,086

={193,53:

U96,86'

={224,344

■ Date of Estimate

5/1/2009

9/2/2009

2/3/201C

7/4/201C

3/5/201C

10/6/20]

Ll/7/20]

12/8/201

F/gure 3; Estimated costing of the Nkandla Project as calculated from May 2009 to December
2010

6.38. Completion of Phase 1 of the Nkandla Project and the Reasons for the
Delay and Escalation in Costs

6.38.1. According to Mr Rindel's evidence, Phase 1 of the Nkandla Project was
completed by about 10 December 2010 and handed over to the client
departments (SAPS and DOD) by February 201 1 .

6.38.2. The three new private residences of the President were also completed
during 2010.

6.38.3. He explained that it was only by December 201 that the Project Team had a
clear indication of what the design by the consultants of Phase 2 of the
Nkandla Project would look like and how much it would cost. That was after
all the designs were finalized.

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6.38.4. According to Mr Rindel, the scale of the project steadily grew from its
inception, not because the basic requirements changed, but because of the
design by the consultants of the implementation thereof.

6.38.5. Mr Makhanya, the Principal Agent, explained during the investigation that the
terrain of the site is on a slope, which, according to him, posed a further
challenge as did the fact that the Nkandla Project had to be implemented in a
very rural area. He further stated that many of the major issues that
materialized during the implementation of the project were not or could not
have been envisaged at its conception. A number of designs had to change
and be reconsidered, which impacted on the costs.

6.38.6. Mr Rindel described the implementation of the Nkandla Project during the
investigation as very much "like building a puzzle without a picture". He
explained that almost everyone involved in the project was exposed to such a
venture for the first time and they therefore basically "wrote the rules as they
went along." Officials of the Regional Office further expressed the view that
the project was "doomed from the start" as the managers of the project were
denied critical information and structures that were in place to manage it
were often bypassed, which was unreasonable.

6.38.7. Mr Makhanya stated in this regard that due to the nature of the Nkandla
Project, the Project Team did not have the luxury of time to plan properly in
advance. Planning had to take place whilst works were being implemented.
Mr Rindel also indicated that design changes were regularly presented by the
SAPS and the DOD and Mr Makhanya. It was his understanding that some of
the changes were as a result of comments or instructions of the President.

6.38.8. Mr Crafford described the Nkandla Project as working with a moving target.

According to his experience, the scale of the project continued to grow, as

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additional items were added practically every month. It was his impression
that these items mainly came from Mr Makhanya, who in his discussions with
the President and the client departments, changed his designs.

6.38.9. According to Mr Khanyile's evidence, the Nkandla Project did not follow the

normal process of demand management and budget planning in the DPW.
Under normal circumstances, a Planning Instruction would have been issued
on the basis of which consultants would have been appointed to design the
project and estimate the costs. The project would then go out on tender. In
this case, he stated, the project was not fully planned in the initial stages.
Information kept coming to the Project Team in pieces on what had to be
done. Much of this information came forth at meetings where the DOD and
the SAPS presented additional requirements. If it was a normal project there
would have been proper planning and budgeting.

6.38.10. It was noted during the investigation that all the officials interviewed agreed

that the pressure coming from DPW Head Office and the Ministry of Public
Works in respect of the Nkandla Project was immense. Mr Khanyile stated in
his evidence in this regard that:

"The project manager and the Regional officials were even terrified that they
will be fired or transferred somewhere else if they do not comply with the
instructions given to them on the project. "

6.38.11. On 21 December 2010, Mr Khanyile submitted an Internal Memorandum to

the new Acting Director-General (Mr Vukela) requesting approval to extend
the Supply Chain Management Delegations of the RBAC to approve all
procurements in respect of Phases 1 and 2 of the project in amounts above
R20 million. The Internal Memorandum stated that such approval as well as

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approval to utilize the nominated procurement process had been granted by
the former Acting Director- General, Mr Malebye. (as referred to above).

6.38.12. The Memorandum furthermore advised that Phase 1 of the Nkandla Project
(emergency works) had been 99% completed and that the Regional Office
was ready to commence with Phase 2.

6.38.13. Reference was made to a meeting held with senior officials of the DPW and
Deputy Minister Bogopane-Zulu on 20 December 2010, where it was
indicated that the works had to be fast tracked. Mr Rindel explained that the
purpose of this meeting was to confirm the scope of works in respect of
Phase 2 and to discuss the final procurement processes that would be used
for implementation.

6.38.14. The proposed date of the completion of Phase 2 was stated as 9 October
201 1 . In this regard the memorandum explained that:

"It must be stated that it is essential that these deadlines be met as the State
already delayed the Owner (sic) of the property and this caused much
embarrassment to the State."

6.38.15. The memorandum was approved by Mr Vukela, on 21 December 2010.

6.39. Reallocation of the 201 0/1 1 Capital Works Budget

6.39.1. The Executive Committee of the DPW approved a reallocation of the DPW
Capital Works budget for the 2010/1 1 financial year that included an amount
of R 57 545 020 under Prestige for the Durban Region, on 1 6 February 201 1 .

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6.40. Further Interaction with the President

6.40.1 . At the Progress Meeting held on 25 February 201 1 , Mr Makhanya confirmed
that the design of the bullet resistant windows was in accordance with the
President's request. It was also recorded in the Minutes of the meeting that Lt
Gen Ramlakan requested that the designs be signed off by the President
before installation could take place.

6.40.2. It was noted that Deputy Minister Bogopane-Zulu requested that all
outstanding works in respect of Phase 1 of the Nkandla Project is completed
by 1 March 201 1 when the President would be going to his home for Easter.

6.40.3. The Minutes further state that Lt Gen Ramlakan had a discussion with the
President in connection with the helipads and that it was confirmed that after
his term of office the helipads could be used for civilian aircraft, subject to the
approval by the relevant aviation authorities.

6.40.4. The issue of the utilization by the Department of Health of part of the Military
Clinic was also discussed and it was recorded that the Deputy Minister would
have a discussion with that Department in this regard. The possibility of the
Department of Health utilizing 25% of the clinic was referred to as a "clip-on".

6.40.5. It was also reported that the Deputy Minister requested a revised estimated
costing of the landscaping, which was submitted to her for her input and
further discussion. She had also raised her concerns about the high
estimated cost of the fire-pool (which was converted into a swimming pool).

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6.41.
6.41.1.

6.42.
6.42.1.

6.42.2.
6.42.3.

The Exit of Deputy Minister Bogopane-Zulu

Deputy Minister Bogopane-Zulu was informed in writing by the then Minister
of Public Works, Ms G Mahlangu-Nkabinde, on 7 March 201 1 that she was
relieved from the responsibility of managing the Prestige Portfolio of the
Department, with effect from 8 March 201 1 .

Requesting Guidance on the Apportionment of Costs

Mr Khanyile submitted an Internal Memorandum to the then Minister of Public
Works under the heading: "DISCUSSION OF APPORTIONMENT OF
COSTS BETWEEN STATE AND PRINCIPAL" on 28 March 201 1 . The aim of
the memorandum was stated as:

"...to provide all the applicable information to Top Management in line with
the apportionment of cost between the State's responsibility and Private (cost
to the owner)".

According Mr Khanyile's evidence, the Regional Office determined the
apportionment of costs with the assistance of Professional Services of the
DPW Head Office. The relevant document was attached to the
memorandum.

The memorandum stated the scope of works was divided as follows:

"Public (State) portion: R203 079 677. 18
Private (Owner) portion RIO 651 580. 64

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The scope of the works included in the Public (sic) is approved and agreed in
the meeting held in HO on 10 March 2011 and is in the process of being
implemented and shall be concluded in line with the mandate given to the
NDPW.

The portion included under "Private" required additional attention
before this can be implemented as it falls outside the scope of security
measures. Please note that the implementation of some of these issues was
unavoidable and some had already been completed.

It was agreed at that meeting that the Department cannot implement any of
the works included in the indicated above without the written instructions from
Top management to do the same. This is a precaution that must be taken
as the works fall outside the mandate piven to the Department.

It is proposed that the works included herein be discussed between Top
Management and Ministry and guidance be given to the way forward with
these issues. It may be necessary to discuss these issues with the
Principal as the financial implication directly affects him (He may want
to implement these issues himself without the interference of the
Department or else he may want to opt to reimburse the Department
after we complete the same), "(emphases added)

6.42.4. Mr Khanyile recommended in his memorandum to the Minister:

• "That the scope of works falling within the mandate of the Department
continues as previously instructed.

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That the scope of works apportioned to the Principal be discussed and
guidance be given to the Team pertaining on (sic) the implementation
thereof before construction will continue".

6.42.5. R&G Consultants explained during the investigation that the cost
apportionment document was prepared with their assistance. The whole
professional team involved in the Nkandla Project participated and every item
of significance was considered and debated before a decision was taken to
qualify it as "private" or "public". They emphasized that every item referred to
in the document was not implemented.

6.42.6. According to Mr Rindel, he never received any response to Mr Khanyile's
letter. He claimed that he was never given any instruction to implement the
portion that was referred to as "private" in the apportionment document and
did not do so.

6.43. Concerns Raised About the Exclusion of the DPW Head Office
Professional Team

6.43.1 . The Ms Pasley, Chief Quantity Surveyor of the DPW, complained in an email
message to Mr Rindel on 30 March 201 1 as follows:

"As you are ware, we are not receiving the required monthly financial reports
on the above-mentioned project.

The consultant Quantity Surveyors are required to submit said reports to the
Department strictly on a monthly basis in accordance with item 13.6 of the
QS Manual and the QS unit is required to scrutinize these reports in
accordance with the Department's revised project management delegations.

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It is imperative that we are kept fully informed, on an on-going basis, of the
financial status of each of the projects. This is unfortunately not happening."

6.43.2. She requested Mr Rindel to ensure that the outstanding reports were
submitted urgently.

6.43.3. In his response, dated 31 March 201 1 , Mr Rindel requested the project team
to comply with Ms Pasley's request. He reiterated:

" The matter indicated by Glenda is a serious issue, as financial management
is core to this project, even more so since the project will probably be audited
by many interested parties. Without the required inputs from all the parties,
this may become a big embarrassment that will sink us. The information is
further required by HO to defend any queries about the scope of works and
costs included therein. "

6.43.4. Mr Rindel explained during the investigation that due to reports that started to
appear in the media in connection with the Nkandla Project, he was
instructed by the office of the DPW Director-General to drastically reduce the
number of people involved and to keep it at a bare minimum. This instruction
included officials from DPW Head Office. The management of information
leaks on the Nkandla Project at this time apparently became as important as
managing the project itself.

6.44. The meeting of 1 April 2011

6.44.1. Despite having been removed from the Nkandla Project by the Minister of
Public Works on 8 March 201 1 , the Minutes of a Progress Meeting held on 1
April 2011 indicate that Deputy Minister Bogopane-Zulu was still very much

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involved. During the investigation, the Deputy Minister denied that she
attended this meeting as she had already been removed from the Nkandla
Project. However, it was minuted that she expressed her concerns about the
delays with the installation of the bullet resistant glass and the lifts that form
part of the safe haven. As far as the Military Clinic is concerned the following
was recorded in the minutes:

"Hon. Deputy Minister H Bogopane-Zulu confirmed that the Clip-On will be an
add-on to the military clinic. Further, she requested that the Clip-On design
be made available for her perusal.

Hon. Deputy Minister H Bogopane-Zulu said that a meeting was held with the
Deputy Minister of Health who confirmed that a Primary Health Facility stage
2 is required. Standard drawings can be obtained from the Department of

6.44.2. It was also recorded that the Deputy Minister raised her concerns about the

apportionment of costs. Mr Rindel indicated that a document outlining the
apportionment between private and public was available. The Deputy
Minister requested to be provided with document.

6.44.3. As far as the fire-pool was concerned, it was recorded that the Deputy
Minister stated that she would discuss the use of the pool by surrounding
schools with the President.

6.45. The involvement of Deputy Minister Bogopane-Zulu Terminated,
Discussions with the President on Aspects of the Nkandla Project and
further Progress Meetings

Health.

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6.45.1.

6.45.2.

6.45.3.

6.45.4.

6.45.5.

6.45.6.

At the Progress Meeting held on 11 May 2011, Mr Rindel reported that
Deputy Minister Bogopane-Zulu was not part of the project anymore. The
Minutes of the meeting indicate that there was uncertainty about the
implementation of her initiative as far as the utilization of the Military Clinic
was concerned, that had to be clarified.

It was further recorded that the implementation of landscaping had not been
approved and that the Deputy Minister had discussions with the President in
regard thereto. Mr Makhanya was requested to submit the landscaping
changes that were made by the DPW to the President for his approval.

Mr Rindel reported at this meeting that the construction of the fire-pool was
put on hold due to uncertainty about the apportionment of costs in respect
thereof. Mr Makhanya confirmed that the design of the fire-pool was
presented to the President.

The next Progress Meeting was held on 25 May 2011, where Mr Samuel
confirmed that Deputy Minister Bogopane-Zulu was not part of the project
anymore. It was decided to continue with the original design of the Clinic.

Mr Makhanya reported that he had met with the President about the
landscaping, but that the issues raised were not concluded and that he had
to reschedule a further meeting for his approval. He indicated that he would
probably meet with the President during the week of 25 May 201 1 .

The Landscape Architect indicated that they could not proceed without the
approval of the President. She also advised that an agreement had been
reached that full public participation was not required for the Environmental
Impact Assessment process.

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6.45.7. Mr Makhanya was also requested to discuss the issue of the fire-pool with
the President. It was recorded in the minutes of the meeting that: " Makhanya
said that the pool has been placed on hold because of the pool bearing a
private costing which the principal (the President) did not accommodate for."
He was also requested to discuss the "infrastructure reguirements
(Marguee)" with him, (emphasis added)

6.45.8. The Project Team discussed the progress made again at a meeting held on
22 June 201 1 . The Chairperson, Mr Samuel, pointed out that the focus was
to complete the project timeously. He also indicated that he was not familiar
with the request for a "clip-on" as far as the clinic was concerned as it was
not requested by the client department.

6.45.9. Lt Gen Ramlakan confirmed that the "clip-on" was not approved by the DOD.

6.45.10. It was further recorded that Mr Makhanya was to have further discussions
with the President on infrastructure requirements. Mr Rindel indicated that
the Landscape Architect was in the process of updating the design on what
had been agreed with the President.

6.45.11. No report back on discussion with the President in respect of the fire-pool
was recorded. It was noted that infrastructure requirements still had to be
discussed with the President.

6.45.12. On 4 July 2011, a Progress Meeting was held on the site, chaired by Mr
Samuel. He requested the expedition of several outstanding items. It was
also recorded in the minutes of the meeting that the Civil Aviation Authority
had agreed to classify the helipads as civilian landing facilities.

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6.45.13. The Landscape Architect indicated that the kraal and the amphitheatre
should not fall under the landscaping component, but under its own structural
entity. The Chairperson "pointed out that it was discussed previously that
landscaping methodology is crucial."

6.45.14. It was further recorded that the fire-pool submission was with the Bid
Committee for approval and that all outstanding matters discussed between
the Deputy Minister and the President had been resolved. No details were
provided in this regard. This confirms the evidence of Deputy Minister
Bogopane-Zulu that the matter of the swimming pool was discussed with the
President.

6.45.15. Mr R Samuel again chaired a Steering and Progress Meeting on 20 July
201 1 . From the Minutes of this meeting (and other similar meetings) it
appears that the Security Manager insisted that the information shared at the
meetings should be handled with discretion. It was specifically recorded that
no correspondence by email relating to the Nkandla Project was permitted
and that all documents considered at these meetings had to be returned to
the Principal Agent.

6.45.16. Officials of the Regional Office indicated during the investigation that the
instructions relating to the secrecy of the Nkandla Project created the
impression that they were not allowed to discuss it with anyone that was not
part of the Project Team, thus limiting them from obtaining outside advice
when it was necessary.

6.45.17. The Chairperson requested that the pace on all aspects of the project
needed to be increased.

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6.46.
6.46.1.

6.46.2.

6.47.
6.47.1.

The Head Office Professional Team Excluded from Further Involvement

On 20 July 201 1 , the Mr Crafford informed members of the Project Team by
email that the Minister of Public Works had given instructions the previous
day that the involvement of Professional Services of the DPW in the Nkandla
Project should continue. However by 28 July 2011, Ms Pasley wrote as
follows to Mr Rindel:

"We currently find ourselves in the unfortunate situation where we are no
longer in touch with the project, as you have excluded us from the project for
the past ±2V 2 months. "

The Minutes of the Progress Meeting held on 4 August 201 1 recorded that
the Security Manager of the DPW expressed the view that as the project was
nearing completion, "we should limit the need for new people to attend the
meetings. "

Additional Funding Requested for 2012/13 Financial Year

Mr Rindel approached senior officials at the DPW Head Office on 16 August
201 1 for the approval of additional funding for the Nkandla Project. He stated
in his memorandum that:

"The approval of the total funding amount, being R200 202 844. 13 (estimated
final cost) is what is needed to be authorised for this project to be
successfully completed. Please note that the allocated amount in the current
fin year is sufficient, being R123 900 000.00 and that no additional funding is
required for this year. The additional amount is required for the next fin year
in order to pay for the last works and final account in the next (2012/13) fin
year. It is not clear to me who is responsible to request this approval from

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PP&M (or other authority?) but I suspect that it may be starting with either of
you. This is quite urgent as I am expected to issue instructions to the
contractors for the completion of the additional works which must be
completed already by 30 October 2011. Note that failure to assist me with
the financial side of this project will result in all of us failinp the
Principal, which will not be accepted lightly by the powers that be."
(emphasis added)

6.47.2. The records of the DPW show that the PMTE Central Budget Committee of
the DPW approved a reallocation of the 201 1/12 Capital Works budget on 16
September 201 1 , which included a reallocated amount for "Special and Major
Projects" (previously listed as "Prestige") in the Durban Region of R132
900 497.

6.48. Final Series of Progress Meetings

6.48.1. On 17 August 2011, the Project Team held a Progress Meeting on the site.
According to the Minutes of the meeting, one of the issues raised was the
outstanding requirements of the DOD in respect of the Military Clinic. Mr
Makhanya reported that the matter was discussed with the Surgeon-General
and that a list of the final requirements would follow shortly.

6.48.2. It was recorded in the Minutes of a Progress Meeting held on the site on 31
August 201 1 that Mr Khanyile and Mr Rindel, expressed their concerns
about the slow progress made throughout the project.

6.48.3. Subsequent Progress Meetings were also held, on 14 September 2011, 28
September 201 1 , 1 2 October 201 1 , 1 9 October 201 1 , and 2 November 201 1 .

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6.48.4. The Minutes of the meeting of 28 September 2011 indicate that Mr

Makhanya reported that the President was concerned about the progress
made on the site and that it might not be available for him to use during
December 201 1.

6.48.5. The Minutes of a Steering and Progress Meeting held and chaired by Mr
Rindel on 30 November 2011 indicate that a number of outstanding items of
the Nkandla Project were in the process of being completed.

6.48.6. The staff quarters were, inter alia, reported as ready for handover to the user

departments, the bullet resistant installations were to be completed on 2
December 201 1 , and safe haven installations were in the final stages. It was
also recorded that works in respect of the guard houses, visitors centre, crew
pavilion and VIP garages were complete or being finalized. Some work still
had to be done on the roads, the helipads, the clinic, security equipment and
the landscaping.

6.49. Further Allocations and Reallocations of the Capital Works Budget

6.49.1. The Acting Chief Financial Officer of the DPW informed its Acting Chief
Operations Officer in writing on 19 November 2012 that the expenditure
incurred, according to the WCS (Work Control System) of the Department,
amounted to R206 420 664. According to the records, the DPW PMTE
Central Budget Committee approved the Capital Budget allocation for the
2012/13 financial year on 7 March 2012. It included an allocation of R36 755
983 under the item "Special and Major Projects" in respect of the Durban
Regional Office.

6.49.2. On 29 August 2012, the Deputy Director: Budget and Planning: PMTE
submitted a written request for the reallocation of the DPW Capital Works

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6.49.3.

6.50.

6.50.1.

6.50.2.

6.50.3.

Budget, which included a reallocated amount of R39 731 029 for "Prestige" \n
respect of the Durban Regional Office. The request was approved by the
PMTE Central Budget Committee on 12 September 2012.

The site was handed over to the client departments on 27 February 2013. Mr
Rindel confirmed in his evidence that all the works implemented by the DPW
in terms of the Nkandla Project, were paid for by the Department.

PART B: THE EVIDENCE ON THE GOODS AND SERVICES PROCURED
BY THE DPW

The Contracts Awarded by the DPW to Contractors for the
Implementation of the Nkandla Project

It was established from the records of the DPW that it awarded 12 contracts
amounting to a total of R157 409 1 19 on the Nkandla Project.

The total value of the above contracts was adjusted/increased after taking
into account variation orders, contract price adjustments (CPA) and
unforeseen items. The total value of the contracts after the
adjustments/increases amounted to R193 814 014.

The contracts were recorded on the WCS system of the DPW. It was noted
that the total value authorised on the system amounted to R189 016 829.00
instead of R193 814 014.75, resulting in a variance of R4 797 185.75
between the amounts approved after taking into account variation orders,
CPA and unforeseen items (R193 814 014.75) and the amounts authorised
(R189 016 829.00).

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6.50.4.

6.51.
6.51.1.

6.51.2.
6.51.3.

6.51.4.
6.51.5.

Mr Rindel could not explain the above variance during the investigation, but
pointed out that the total project expenditure did not exceed the total
authorised amount above. It was noted that 94% of the variance (R4 520
052.54 of R4 797 185.75) was as a result of the Bonelena Construction
Enterprise & Projects' contract being authorised on the Works Control
System (WCS) for an amount of R64 853 188.00. The contract was approved
for an amount of R69 373 240.54.

Payments Made to Contractors Appointed by the DPW

During the investigation a review of the recorded payments made by the
DPW to contractors was performed in order to determine the total amounts
paid and whether the authorised amounts were not exceeded.

It was found that the total payments to contractors amounted to R161 418
824.26 and that the authorised amounts were not exceeded.

Although an amount of R189 016 829.00 was authorised on the WCS, the
total amount paid to contractors at the time of the conclusion of the
investigation was R161 418 824.26, resulting in a saving of R27 598 004.74
on the authorised amount.

R&G Consultants confirmed during the investigation that the said contracts
have been completed.

R&G Consultants further indicated that over and above the total amount paid
to contractors, six additional payment certificates amounting to a total of R3
672 748.49 had been certified for payment at the time of the conclusion of
the investigation. These payment certificates were yet to be paid by the DPW
and will increase the total contractor payments to R165 091 572.74.

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JCjLIC F>EO>TE<:.TOk
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6.51.6. The saving on the authorized amount referred to above will accordingly be
reduced to R23 925 256.26 (R189 016 829.00 - R165 091 572.74).

6.51 .7. R&G Consultants confirmed that they were finalising the final accounts on the
Nkandla Project and that it was expected that the final contractor payments
would be around R167 million.

6.51.8. It should be noted that that the project was segmented into 3 phases. Phase
3 had not commenced at the conclusion of the investigation.

6.52. The Payments Made to Consultants Appointed by the DPW

6.52.1. From the investigation it was found that 7 teams of professional consultants
were involved in the Nkandla Project and were paid a total of R50 352 842.93
for Phases 1 & 2 only. The list of consultants involved and total payments
made to them are as follows:

TOTAL PAYMENTS

CA du Toit

Security Consultants

R 2,691,231.49

Ibhongo Consulting CC

Civil & Structural Engineers

R 6,006,457.36

Igoda Projects (Pty) Ltd

Electrical Engineers

R 2,503,732.89

R&G Consultants

Quantity Surveyors

R 13,794,957.70

Minenhle Makhanya Architects

Architects, Principal Agent

R 16,587,537.71

Mustapha & Cachalia CC

Mechanical Engineers

R 3,676,448.05

Ramcon

Project Management
Project Managers

R 5,092,477.73

TOTAL

R 50,352,842.93

Figure 4: List of Consultants and total payments made to each

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6.53. Summary of the Works Implemented by the DPW

6.53.1. From the investigation a summary of the works implemented by the DPW
and the items constructed and/or service installed was found to be as follows:

DESCRIPTION

AMOUNT (R)

Safe Haven, Corridor Link, Walkway Above & Exit Portion

R 19,598,804.10

20 Residential Staff Houses (40 units) and Laundry Facility

R 17,466,309.67

Relocation of 1,5 Households - Moneymine 310 CC*

R 4,223,506.68

Relocation of 2 Households - Bonelena Construction

R 3,698,010.76

Clinic and SAPS Garage

R 11,900,233.76

Visitors Centre & Control Room #

R 6,720,852.95

Tuck-shop, Transformer & LV Room, Genset Room & Refuse Area

R 956,381.16

Guard House 1

R 1,205,827.49

Guard House 2 & 3

R 1,367,770.87

Crew Pavilion

R 997,831.00

Sewer Pump Station

R 807,782.16

Fire Pool and Parking

R 2,819,051.66

Sewer Treatment Plant

R 1,030,673.68

Booster Pump Station and Steel Reservoir Tank

R 571,278.25

New Residences: Security Measures & Air-conditioning

R 5,038,036.33

General Siteworks(A/ote 1)

R 67,964,858.55

SUB-TOTAL CONSTRUCTION COST

R 146,367,209.07

ADD: CONTRACT PRICE ADJUSTMENT PROVISION

R 1,231,109.08

LESS: PENALTIES IMPOSED FOR LATE COMPLETION OF THE CONTRACT

-R 2,781,149.08

SUB-TOTAL NET ESCALATED CONSTRUCTION COST

R 144,817,169.07

VAT (14%)

R 20,274,403.67

Figure 5: Summary of the works implemented by the DPW

* The reference to 1 .5 households here relates to the fact that not all of the buildings of the one
household were replaced as it already had an existing building at the place of relocation.

# The control room referred to here is the lower part of the building. The visitors centre (lounge) is on the
first floor.

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6.53.2. The above table shows that various structures/items were constructed and
services installed at a cost of R165 million. This amount includes the 6
additional payments certificates amounting to R3.6 million which have been
certified by R&G Consultants but not yet paid by the Department at the
conclusion of the investigation.

6.53.3. It was noted that an amount of R67 964 858.55 was allocated to "General
Site Works".

6.54. The Total Cost of the Nkandla Project

6.54.1. At the time of the conclusion of the investigation, the total expenditure
incurred by the DPW in respect of the Nkandla Project amounted to R215
444 415.68 constituted as follows:

Total payments to contractors

R 161,418,824.26

Value of contractor payment certificates certified
but no yet paid

R 3,672,748.49

Total payments to Professional Consultants

R 50,352,842.93

Cost estimate for Phase III excluding Consultants
fees

R 31,186,887.36

TOTAL

R 246,631,303.04

Figure 6: Total Expenditure in Respect of the Nkandla Project

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6.55.
6.55.1.

6.55.1.1
6.55.1.2
6.55.1.3
6.55.1.4

6.55.1.5
6.55.1.6
6.55.1.7

6.55.1.8
6.55.1.9

The Estimated Cost to the State of the Implementation of Phase 3 of the
Nkandla Project

From the evidence and information obtained during the investigation, it was
established that, inter alia, the following works still need to be completed as
envisaged by Phase 3 of the Nkandla Project:

Safe Haven;

Fire truck garage and waste disposal facility to be constructed;

Rehabilitation and landscaping to park homes site to be implemented;

High security inner perimeter fence around the Military Clinic area and main
entrance to be constructed;

Storm drainage to sloped earth banks to be rehabilitated.

The installation of aviation equipment to be completed.

Medical equipment to be provided and installed at the Military Clinic in
accordance with the DOD standards.

Paved Road to helipad and access control to be constructed.

Landscaping and fencing to excess parking area, located to the south of the
precinct.

Electrical works.

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6.55.1.11 Civil works

6.55.1 .1 2 A few other internal installations.

6.55.2. It is estimated that the above works will cost a total of R31 186 887.36
excluding consultants' fees. Should the above outstanding works be carried
out at the estimated value provided, the Nkandla Project would cost a
minimum of R246 631 303.04 calculated as follows:

Total payments to contractors

R 161,418,824.26

Value of contractor payment certificates certified but no yet paid

R 3,672,748.49

Total payments to Professional Consultants

R 50,352,842.93

Cost estimate for Phase III excluding Consultants fees

R 31,186,887.36

TOTAL

R 246,631,303.04

Figure 7: Estimated Total Costs of the Nkandla Project (Including Phase 3)

6.55.3. It was noted that the Mr Rindel approached the Acting Director-General of
the DPW in an Internal Memorandum, dated 15 August 2012, recommending
approval of the commencing of Phase 3 of the Nkandla Project, a negotiated
procurement strategy in respect of the appointment of Moneymine for the
works and a delegation allowing the Regional Office to approve all
procurements in respect thereof. The Acting Director-General approved the
Memorandum on 16 August 2012.

6.55.4. However, it appeared during the investigation that due to the investigations
into the propriety of the Nkandla Project, the implementation of Phase 3
thereof was suspended.

6.55.5. During the investigation I requested the DPW and the DOD to provide me
with information relating to the security measures that were installed by the
state at the private residences of former Presidents Botha, De Klerk,

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Mandela and Mbeki, to enable me to make a comparison. The idea was to
use the comparison to get a sense of what was the original vision of the
crafters of the policy instruments authorizing security measures at private
residences of Presidents, Deputy Presidents, former Presidents and former
Deputy Presidents. The underlying thinking was that the cost indications
would give some idea of the scale of works that was envisaged.

6.55.6. The information supplied revealed that at R215 million and still rising, the
cost of security installations at President Zuma's private residence far
exceeds similar expenditure in respect of all his recent predecessors. The
difference is acute, even if an allowance is made for real Rand value, the
rural nature of the Nkandla area and the size of President Zuma's household
made detached dwellings. According to information supplied by the DPW, the
cost involved in securing the private residences of the last five SA Presidents
is as indicated in the table below:

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R 250,000,000

R 200,000,000

R 150,000,000

R 100,000,000

R 50,000,000

R 241 000 000.00

R 173 338.32

(R20 101.67)

R 236 484.78

(R42 196.19)

R 32 000 000.00 R 12 483 938.17

(R 8 113 703.24)

-TP m

33.24)

Botha De Klerk Mandela Mbeki

□ (Actual Value) □ Estimated 2013 Value

Zuma

Figure 8: Past and Present Presidential Private Residence Security Costs

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PART C: THE SUPPLY CHAIN MANAGEMENT PROCESS
6.56. The Procurement of the Services of Consultants and Contractors

6.56.1 . At the time when the Nkandla project was initiated, the internal arrangements

of the DPW provided that the procurement of goods and services up to a
maximum of R20 million per procurement could be approved at the level of a
Regional Office. Any procurement of more than R20 million had to be
submitted to the Special National Bid Adjudication Committee at the DPW
National Office.

6.56.2. During the investigation it was established that Mr Malebye, the Acting

Director-General of the DPW, met with the Project Team and Mr Rindel on 5
October 2009 in connection with the procurement process in respect of
goods and services for the Nkandla Project.

6.56.3. The issues discussed at the said meeting appear as follows from an Internal
Memorandum submitted by Mr Khanyile to Mr Malebye, on 9 October 2009:

"The nominated procedure will be utilized. Contractors in larger northern
KZN should be targeted in order to benefit from the works.
The private QS (Quantity Surveyor) identify firms for general building,
civil engineering works and electrical installations. This would be utilized
for a nominated procedure.

The RBAC must approve the procurement strategy above R 20,
000,000.00."

6.56.4. Mr Khanyile described the delegations required from the Acting Director-
General as follows:

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"1. The responsibility of selecting contractors vests with SCM in the
regional office. It is requested that DG confirms that this office may
deviate from this responsibility in that the list as provided by the private
QS may be used.

2. The RBAC currently only has the delegation to approve any
procurement strategy or tender below a limit of R20,000,000.00. It is
requested that for this project only this delegation should be increased
to above R20,000,OO.OQ.

This will result in this office gaining complete control over the
procurement process and that any communication with the SNBAC will
not delay the project.

If this request is denied, the RBAC will still forward the Procurement
strategy to the SNBAC by 9 October 2009, but no guarantee can be
given on the expected date of approval.

3. The list of names for the nominated tender for NIA clearance had been
forwarded to HO for assistance in fast tracking, (emphasis added)

6.56.5. Mr Malebye approved the requests on the same day (9 October 2009).

6.56.6. In his evidence, Mr S Malebye, explained that he acted as Director-General
from the beginning of 2009 until 31 March 2010, when he resigned. Mr S
Vukela took over from him as Acting Director-General.

6.56.7. Due to the fact that the original cost estimate of the Nkandla project, based
on the analysis of the security measures that had to be taken, amounted to
approximately R27 million, Mr Malebye was of the opinion, according to his

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evidence, that approval of the request from the Regional Office to provide the
RBAC with a delegation to approve procurements above R20 million at the
time implied that the delegation would not be utilised for an amount above
R27 million.

6.56.8. The list of contractors referred to by Mr Khanyile in his said Memorandum
was prepared and sent by email to Mr Rindel on 8 October 2009, by R&G
Consultants. In his email message, Mr Gqwaru of R&G Consultants stated,
inter alia, the following:

1. These contractors are registered with the CIDG (sic) and most of them
have the necessary grading 6GB PE.

2. They are currently doing in the area (sic) and therefore understand the
local communities.

3. We, as a professional team, have screened them, and we are satisfied
that they can deliver the goods. "

6.56.9. The list provided by R&G Consultants included the names of 7 general
building contractors, one of which was Bonelena Construction.

6.56.10. Mr Khanyile submitted a further Internal Memorandum to the Acting Director-
General (Mr S Vukela) on 21 December 2010, requesting reconfirmation of
the delegation granted to the Regional Office by the former Acting Director-
General (Mr S Malebye), in respect of which the Regional Office could

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procure goods and services for the security project in amounts exceeding
R20 million. The Memorandum was approved the same day.

6.56.11. When Mr Khanyile was provided with an opportunity to respond to the
evidence obtained from the documents referred to above, he stated that the
Project Manager of the Nkandla Project was subjected to unusual
interference by DPW Head Office and the "political heads" of the DPW in the
procurement of service providers.

6.56.12. He further explained that at the time when the Nkandla Project was initiated,
the officials of the Regional Office were not aware of the involvement of Mr
Makhanya and other consultants and contractors in the President's private
construction works. It was Mr Malebye that informed the Project Manager (Mr
Mahadeo at the time) that Mr Makhanya was managing the President's
private project.

6.56.13. The procurement process of contractors consisted only of nominated and
negotiated procurement strategies and direct appointments. The reasons for
the deviations from the prescribed open tender process appear from the
relevant DPW Internal Memoranda, Request for Approval of Procurement
Strategies and the minutes of the RBAC meetings.

6.56.1 4. The main reasons for the deviations were recorded as the following:

6.56.14.1 Due to the security nature of the Nkandla Project, only contractors approved
by NIA could be used. An open tender process would also have taken too
long;

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6.56.14.2 Contractor (Moneymine) was appointed by the President to construct private
dwellings on the site. The scope of security works assigned to this contractor
had to be integrated with private works.

6.56.1 4.3 "A meeting was held with Deputy Minister Bogopane-Zulu and DDG: ICR&PS

on 21 December 2010 in which she confirmed that the Principal (President)
indicated that he does not want other contractors on site Phase II opposed to
Phase I. The meeting agreed that the works should be negotiated. The
reasons for nominating this contractor is the contractor are (sic) currently on
site, performing under Phase I. The contractor's performance is good,
reached all the tight goals on time management and delivered the project on
time."

6.56.14.4 "It was identified during September 2011 that the SAPS and DOD housing
during the December periods and thereafter, would not be sufficient. It was
agreed with the SAPS, DOD and the Honourable Minister that additional
accommodation would be provided for the clients in line with their security
protocol." The contractor was the only park home supplier in the KZN
Province.

6.56.14.5 Due to the installation of BRG glass in the buildings, the installation of air
conditioners became critical and had to be done on an emergency basis

6.56.1 4.6 "It became clear that it would be beneficial to the State to issue a direct order
to the supplier for the following reasons:

expedite the works (reduce the security risk)

No mark-up to contractor on site-financial benefit to the State." The
order issued, was based on the instructions from Top Management, in
order to procure the manufacture, supply and installation of the security

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glass at the above mentioned site. "This office (the Regional Office) was
instructed to ensure that the order be given out on the same day as the
decision taken. "

6.56.14.7 Due to changes in SAPS requirements the installation of the fence became
critical. Contractor the only supplier of the particular product in the country.

6.56.14.8 The Acting Director-General directed that the procurement process should be
limited to one supplier due to security reasons.

6.56.15. The main reasons for the deviations for the appointment of consultants were
similarly recorded as the following:

6.56.15.1 Appointed by the President in respect of the construction of private
residences. Scope of works of the security project had to be integrated with
private works.

6.56.15.2 The security project had to be fast tracked due to a deadline for completion
set by the Ministry of Public Works.

6.56.15.3 The time period within which the project had to be completed did not allow for
an open tender process.

6.56.16. Mr Khanyile stated the following in regard to reporting the deviations to the
National Treasury:

"When the project manager wanted to report deviations to Treasury, he was
informed by head of security, Mr Z Rambau at head office that all deviation
documents should be sent to him for discussion with the DG and Treasury.

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When the Auditor-General requested files for project A (the Nkandla project)
to be audited, the security manager at head office and DG refused that such
documents for project A, be given to AG. The Region informed them that it
will be regarded by the Auditor-General as limitation of scope. They refused
our advice. This is one of the reasons that the Department got a disclaimer
from the Auditor-General. "

6.56.17. No evidence was presented during the investigation that any of the
deviations referred to above was reported to the National Treasury.

6.56.18. Furthermore the explanation of internal memoranda that consultants
procured without tenders were motivated by them being security vetted is
contradicted by findings of the Ministerial Task Team that investigated the
Nkandla irregularities.

6.57. Variation Orders

6.57.1 . The National Treasury Instruction Note on Enhancing Compliance Monitoring
and Improving Transparency and Accountability in Supply Chain
Management issued in terms of section 76(4) (c) of the PFMA on 31 May
201 1 states the following in respect of Variation Orders:

"It is recognized that, in exceptional cases, an accounting officer or
accounting authority may deem it necessary to expand or vary orders against
the original contract.

The absence of a prescribed threshold for the expansion or variation of
orders against the original contract has, however, led to gross abuse of the
current SCM system.

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In order to mitigate against such practices, accounting officers and authorities
are directed that, from the date of this instruction note taking effect, contracts
may be expanded or varied by not more than 20% or R20 million (including
all applicable taxes) for construction related goods, works and/or services
and 15% or R15 million (including all applicable taxes) for all other goods
and/or services of the original value of the contract, whichever is the lower
amount.

Any deviation in excess of these thresholds will only be allowed subject to the
written approval of the relevant treasury. Whilst provision is made for
deviations, it is imperative to note that requests for such deviations may only
be submitted to the relevant treasury where good reasons exist. "

6.57.2. The motivation submitted in respect of the variation order of R1 1 244 652.25,
which amounted to 58,65% of the original contract amount, was as follows:

• "Additional work was given to the contractor as this was an emergency
contract and the works had to be completed for the December period;

• The construction of the roads and helipads were required in order for
the Principal (President) to gain access to the premises.

• All site services to be commissioned (sewer treatment plant and steel
reservoir) so that entire premises is operational by December.

• Major earthworks for platforms had to be created for the park homes
that will house SAPS and SANDF during the December period.

• A cattle culvert area that contained a lot of earthworks had to be created
to allow for access of the livestock."

6.57.3. The variation order that represented 52.7% of Moneymine's original contract
related mainly to re-measurements based on changes in and additions to the
designs and bulk earthworks that had to be done as part of Phase 1 .

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PART D: EVIDENCE ON SPECIFIC ISSUES CONSIDERED DURING THE
INVESTIGATION

6.58. The Budget for the Nkandla Project

6.58.1. The Explanation Provided by the Director-General of the DPW

6.58.1.1 During the investigation, Mr Dlabanthu, the Director-General of the DPW,
was requested to explain how the Nkandla project was budgeted for by the
Department.

6.58.1 .2 In his written reply, dated 1 9 March 201 3, the Director-General stated that:

"As far as the budget for the above mentioned is concerned, it seems that
there was no specific budget allocated for the upgrade of security measures
at the President's private residence in Nkandla. The approach adopted was
that funds would be made available when savings materialized from Prestige
and DPW capital projects.

In 2010 finds were shifted from Inner City Regeneration and DPW dolomite
programme for the security upgrade in Nkandla." (emphasis added)

6.58.2. The Evidence of the Former Chief Financial Officer of the DPW

6.58.2.1 Ms C Motsitsi, who was the Chief Financial Officer of the DPW when the
Nkandla project commenced, was interviewed during the investigation.

6.58.2.2 According to her, the budgetary process of the DPW entailed that the
Regional Managers submitted proposed budgets for the regions for the next

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6.58.2.3

6.58.2.4

6.58.2.5

6.58.3.

6.58.3.1

6.58.3.2

financial year(s) to the Budget Committees at the Head Office, which would
consider it against the total amount available for the Department, and
allocate budgets according to priorities.

Despite having been in the position of Chief Financial Officer of the
Department at the relevant times, she was not involved in the funding of the
Nkandla project. The project was, in her view, not managed at the normal
levels of officials as the Director-General, Minister and Deputy Minister were
directly involved.

All she knows is that at some stage funds had to be relocated from other
projects of the Department in order to fund the Nkandla project.

In this regard she had often raised the issue of the Prestige Programme of
the DPW, which caters for the residential accommodation of members of the
Executive and was often over committed and not properly budgeted for. This
resulted in regular relocation of funds from other necessary projects of the
DPW to the Prestige budget.

Information Provided by Ms S Subban, Deputy Director General of the DPW
and Mr K Khanyile, the Former Regional Manager During the Investigation

Ms Subban was a member of the Capital Budget Committee of the DPW at
times relevant to the Nkandla Project.

She explained that in June 2010, she was requested by the then Acting
Director-General (Mr Vukela) to find a way of making funding available for the
Nkandla project as the funding allocated to the Prestige budget was
inadequate.

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6.58.3.3 The request for funding emanated from the Durban Regional Office. It was
submitted to the Planned Maintenance Budget Committee (PMBC) that
approved and it was then submitted to the Capital Budget Committee of the
DPW for ratification.

6.58.3.4 She further explained that it was initially envisaged that the Nkandla Project
could be funded from the savings of the DPW on other projects, as the
original amount requested was only R27 million.

6.58.3.5 In order for the funding of the project to be properly administered, it was
registered on the Works Control System (WCS) of the DPW.

6.58.3.6 Mr Khanyile confirmed that the Nkandla Project was not budgeted for in
advance and that the Regional Office had to approach the PMBC for
additional funding in August 2009. It was regarded as an emergency due to
the urgency that arose as a result of the appointment of Mr Zuma as the
President in May 2009.

6.58.4. The Evidence of the Project Manager and the Project Budget Administration
Manager of the Regional Office

6.58.4.1 Mr Rindel and Mr Nadu, the Assistant Director: Project Budget Administration
of the Regional Office, explained during the investigation that after the initial
request for funding was approved by the DPW Head Office, the Nkandla
project was registered on the WCS of the DPW, which is an electronic
budgetary tool that enables the Department to update the estimated costs
and payments made to assist it to budget and allocate funding when
necessary.

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6.58.4.2 As the project progressed and designs by the professional team of
consultants were costed, the WCS was updated. The process was reviewed
every month and budget allocations reconsidered quarterly.

6.58.4.3 The initial cash flow projections of the DPW as recorded on the WCS in
respect of the Nkandla project were as follows:

2010/2011

R 36,136,364

2011/2012

R 108,817,103

2012/2013

R 18,000,000

2013/2014

R 30,939,249

Total

R193 89 716

Figure 9: DPW Cash Flow Projections in respect of the Nkandla Project

6.58.5. The Evidence and Information Obtained from the Records of the DPW

6.58.5.1 From the limited documents that I could obtain from the DPW during the
investigation relating to the budget for the Nkandla Project (already referred
to above), it was established that the first recorded request for funding was
dated 6 August 2009, when the Director: PPM requested the PMBC to
approve the amount of R27 893 067, which was granted. It soon became
clear to the Project Team that the Nkandla project would be implemented
over a period that would cover more than one financial year.

6.58.5.2 By February 2010, the cost estimate submitted by R&G Consultants
indicated that an amount of R80 836 249 would be required.

6.58.5.3 On 10 June 2010, Mr Rindel reported in an Internal Memorandum to the
DPW Head Office that no funding was allocated for the Nkandla Project. He
indicated that the funding required for the 2010/201 1 financial year amounted
to R38 920 896 and for the 201 1/2012 financial year to R38 1 82 065.

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6.58.5.4 It appears from the Internal Memorandum dated 14 June 2010 that Mr
Rindel's request was approved by the PMBC and the Acting Director-General
approved the reallocation of R20 million from the Inner City Regeneration
Programme and R20 million from the Dolomite Risk Management
Programme to the Nkandla Project.

6.58.5.5 The minutes of the DPW Central Budget Committee meeting held on 13 July
2010 indicated that it approved the reallocation of an additional R18 million of
the 2010/2011 Capital Works budget from the amount allocated to BCOCC
"to fund security measures for Prestige".

6.58.5.6 The Executive Committee of the DPW approved a further reallocation of the
2010/2011 Capital Works budget on 16 February 2010, which resulted in a
total budget allocation in respect of Prestige for the Durban Region for
201 0/201 1 in the amount of R57 545 020.

6.58.5.7 By December 2010, R&G Consultants advised the Director-General of the
DPW in writing that the cost estimate of the Nkandla Project amounted to
R224 344 542.

6.58.5.8 On 16 August 2011, Mr Rindel informed the DPW Head Office in an Internal
Memorandum that a total amount of R200 202 844.13 was required to
complete the Nkandla Project. He further indicated that the amount of R123
900 000 that was allocated to the project for the 2011/2012 financial year
was sufficient, but that the balance would be required in the 2012/2013
financial year.

6.58.5.9 The DPW Central Budget Committee, according to the minutes of a meeting
held on 16 September 2011, approved a reallocation of the 2011/2012

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Capital Works budget based on projected "savings" from other programmes
that resulted in the budget allocated to the Regional Office under for Special
and Major Projects (Prestige) amounting to R132 900 497.

6.58.5.10 The approval of a reallocation of the 2012/2013 DPW Capital Works budget
was recorded in the minutes of the DPW Central Budget Committee held on
7 March 2012, in terms of which the amount allocated for Special and Major
Projects to the Regional Office was R36 755 983.

6.58.5.11 A further reallocation of the 2012/2013 Capital Works budget in favour of
Prestige in respect of the Regional Office was approved by the DPW Central
Budget Committee on 12 September 2012 (according to the minutes), taking
the allocated budget to R39 731 029.

6.58.5.12 It was noted that the Inner City Regeneration and Dolomite Risk projects on
several occasions featured as programmes from which reallocation of funds
were made.

6.58.5.13 The total budget allocations to the Durban Regional office for Prestige for the
financial years 201 0/201 1 to 201 2/201 3 are as follows:

FINANCIAL YEAR

ALLOCATED AMOUNT

2010/2011

R 57,545,020

2011/2012

R 132,900,497

2012/2013

R 39,731,029

Total

Figure 10: Prestige Budget Allocations by the Durban Regional Office of the DPW for certain

financial years

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6.58.5.14 According to Mr Rindel's evidence, the only Prestige Project that the
Regional Office was involved in during this period was the Nkandla Project.

6.58.6. The Budget Projections in Respect of Prestige Projects as Reflected in the
Strategic Plans of the DPW

6.58.6.1 It is common cause that the accommodation of members of the Executive
and the associated costs in respect of security measures fall under, what is
referred to by the DPW as 'Prestige" projects or programmes. These projects
of programmes form part of the Infrastructure (Capital Works) Budget of the
Department.

6.58.6.2 It was noted during the investigation that the 2010/13 Strategic Plan of the
DPW indicated the 201 0/201 1 budget for Prestige as R283 898 000.

6.58.6.3 The reference to "Prestige" was replaced with "Special and Major Projects" in
the 2011/14 Strategic Plan. According to evidence presented by officials of
the DPW during the investigation, the reason for this change was that there
were concerns about the media's interest in the amounts spent on Prestige
projects, as reflected in the Strategic Plan and the view that it should rather
be referred to differently was accepted and implemented.

6.58.6.4 The DPW Capital Infrastructure Budget for 2011/2012 stated as amount of
R725 877 331 for Special and Major Projects.

6.58.6.5 The 2012/2016 Strategic Plan shows a budgeted amount for 2012/2013
under Special Projects of R323 742 000.

6.58.7. The Inner City Regeneration and Dolomite Risk Management Programmes of

the DPW from which Funds were Reallocated to the Security Project:

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6.58.7.1 The main objectives of the Inner City Regeneration programme was,
according to the 2010/13 Strategic Plan:

"to rejuvenate inner towns and cities through the provision of improved

physical working environments to 40 national government

departments/agencies in the various inner cities;

To create a centre of excellence for project management through

planning, execution, monitoring and training; and

To provide built environment, procurement and contractual professional

advice, support services, standards and risk mitigation services to the

Department. "

6.58.7.2 The details of the Dolomite Risk Management Programme of the DPW do not

appear from the contents of the Strategic Plans of the Department. However,
its importance is obvious from the substantial amounts allocated in budgets
of the DPW to this programme.

6.58.7.3 In a document entitled: "APPROPRIATE DEVELOPMENT OF
INFRASTRUCTURE ON DOLOMITE: GUIDELINES FOR CONSULTANTS"
issued by the DPW in August 2003, the importance of the Dolomite Risk
Management Programme is referred to as follows:

" The objective of applying a risk management strategy to infrastructure is
to ensure the safety of personnel and visitors, protection of property and to
avoid fruitless expenditure. Avoiding sinkholes is not only important from a
safety point of view, rehabilitating sinkholes and repairing
buildings/infrastructure is costly.

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In a climate of increasing awareness of individual rights, it is apparent that
failure to proactively manage dolomite risk may constitute dereliction of duty
and may expose the Department of Public Works, its officials, its principal
agents and other consultants involved, to recourse through a number of
avenues, including the Occupational Health and Safety Act of 1993. It should
be clearly understood that principal agents and consultants are not absolved
of their responsibilities and cannot claim ignorance in the event of damage or
loss of life in a sinkhole.

In terms of bona mores, the criterion of reasonableness, it is essential that
the Department of Public Works and its consultants "act" and are seen to act
positively in order to prevent harm. Infrastructure must be appropriately
designed, constructed and serviced to facilitate management of dolomite risk
to this end the Department of Public Works has adopted a Centralized
Dolomite Risk Management Strategy for infrastructure located on all dolomitic
land."

6.59. The Ownership and Legal Occupation of the Land where the DPW
Constructed Buildings and Security Installations

6.59.1. It was established from the evidence and information obtained during the
investigation that President Zuma's private residence is located on traditional
land, which is owned by the Ingonyama Trust.

6.59.2. A significant part of the Nkandla project that was implemented by the DPW
consisted of construction and other works on land immediately adjacent to
the land that constitutes the President's private homestead. These
constructions included the two helipads, the Military Clinic, the Crew Pavilion
for pilots, a guard house, a generator room, the tuck shop, the
accommodation for the SAPS and DOD staff and associated buildings.

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6.59.3. The affairs of the Ingonyama Trust are administered by the KwaZulu-Natal
Ingonyama Trust Board that was established by virtue of the provisions of
section 2A of the KwaZulu-Natal Ingonyama Trust Act, 1994.

6.59.4. Section 2(5) of this Act provides that the Board "shall not encumber, pledge

lease, alienate or otherwise dispose of any of the said land or any interest or
real right in the land, unless he (sic) has obtained the prior written consent of
the traditional authority or the community authority concerned and otherwise
than in accordance with accordance with the provisions of any applicable
law." (emphasis added)

6.59.5. The Minister of Public Works indicated in his response to my enquiries, dated

5 December 2012, that approval was sought by the DPW from the
Ingonyama Trust to build on the said land and that a lease agreement was to
be concluded. From the documents attached to his further response in
connection with the matter addressed to me on 11 March 201 1 , it was
established that the Nxamalala Traditional Council issued a TRADITIONAL
COUNCIL CONSENT, on 21 October 2010.

6.59.6. This consent document states that at a meeting of the Traditional Council

held on 21 October 2010 it was resolved that the Council had no objection to
the "application to acquire rights to land by the National Department of Public
Works" in respect of what appears to be the land that was required for the
construction of buildings and other structures for the Nkandla Project.

6.59.7. It is important to note that the consent document specifically stated the
following:

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"The form of tenure thereof (the acquiring of the land) to be agreed between
the applicant and the Ingonyama Trust Board as land owner -in-law in terms
of section 3 of the Ingonyama Trust Act, Act 3 of 1994, as amended. This
consent is given in terms of section 2(5) of that Act.

The Traditional Council confirms that all persons occupying or having an
interest in the land have been consulted and have no objections to the
proposals.

The applicant (the DPWJ has been advised and confirms that he/she/it will
not do anything or erect any structure on the land until an appropriate tenure
right has been granted to and the necessary documents have been signed
with the Ingonyama Trust Board ." (emphasis added)

6.59.8. From the information provided by the Minister of Public Works, the
"appropriate tenure right" referred to in the consent document is a long term
lease agreement.

6.59.9. The contents of the written consent granted by the Nxamalala Traditional
Council was clearly only an indication that it had no objection to the
application of the DPW to lease the land concerned. However, the Council
resolved that nothing could be done and no structure could be erected on the
land before the terms of the lease had been agreed on and the relevant
lease agreement had been signed by the parties.

6.59.10. In his letter addressed to me on 1 1 March 2013, the Minister of Public Works
stated that:

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"On the question of the lease agreement, I previously explained that the
investigation found that there was an unsigned lease agreement between the
Department of Public Works and the Ingonyama Trust that was supposed to
be signed in 2011. However, for unknown reasons it was not signed. I
requested my office to attend to the matter, however I was advised that the
lease agreement needed to be re-negotiated as it was not in the interest of
the Department." (emphasis added)

6.59.1 1 . At the time of the conclusion of the investigation, there was no indication that
a lease agreement had been signed by the DPW in respect of the land
concerned.

6.60. President Zuma's Private Residence Declared a National Key Point.

6.60.1 . President Zuma's private residence was declared a National Key Point by the
Minister of Police in terms of the National Key Points Act, on 8 April 2010.
However, the acknowledgement of receipt in the Presidency is dated 7 April
201 1 . The Director-General of the Presidency confirmed the accuracy of this
date during the investigation.

6.60.2. The evidence in respect of the security evaluations conducted by and the
involvement of the Security Advisory Service of the SAPS in the Nkandla
project.

6.60.3. From the documents obtained during the investigation, it was established, as
indicated above, that the Security Advisory Service of the SAPS conducted a
security evaluation of the President's private residence on 28 May 2009, i.e.
1 9 days after Mr Zuma took office.

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6.60.4. The security evaluation was recorded in an 11 page report that was
presented to the DPW.

6.60.5. Brigadier Adendorff, the Head of the Security Advisory Service of the SAPS,
was interviewed during the investigation. She explained that Security
Advisory Service is tasked to look after the security requirements in respect
of the protection of, inter alia, members of the Executive as far as their official
and private residences are concerned. It conducts security evaluations of the
premises taking into consideration any threats to the person involved. It does
not work together with the State Security Agency. The possible threat to the
member of the Executive is determined by Security Advisory Service.

6.60.6. Her evidence was confirmed during the investigation by Major-General
(Retired) T Kulu, who at the relevant time was the Head: Government
Security Regulator of the SAPS. Brigadier Adendorff reported to her on the
security evaluations that were conducted. Maj. Gen. Kulu left the employ of
the SAPS in November 201 0.

6.60.7. The security evaluation includes a site visit of the residence concerned and
the advice is informed by the applicable training of the security advisors in
such matters, benchmarking exercises and research on the latest security
measures that are available.

6.60.8. Security Advisory Service also based its security advice on a standard that is
contained in a document entitled: "Minimum Physical Security Standards"
(MPSS) and its annexures relating to residences. This is the basic
documented standard, but depending of the circumstances, deviations may
be required.

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6.60.9. She further stated that it was not possible to benchmark the security
measures required in respect of the President's private residence against the
security measures that are implemented by other countries as such
information is not readily available.

6.60.10. The situation with regard to the President's private residence at Nkandla was
complicated due to the fact that it consists of several dwellings and not one
house that would be much easier and cheaper to secure. It was therefore,
according to Brigadier Adendorff, also problematic to compare the measures
taken at the private residences of former Presidents Mbeki and Mandela with
the measures that had to be installed at President Zuma's private residence.

6.60.1 1. The measures that were recommended by Brigadier Adendorff in respect of
the President's private residence were based on the MPSS. However, the
situation at the residence resulted in a number of deviations due to the fact
that it consisted of several buildings, is located in a rural area and is large in
scale.

6.60.12. In her evidence, Brigadier Adendorff further stated that when Security
Advisory Service visited the private residence of the President on 28 May
2009, the officials involved found that the residence was in a very remote and
rural area. The site consisted of a few huts surrounded by a dilapidated
palisade fence and an ordinary guard hut. There was no running water and
that the site was very "difficult".

6.60.13. It was observed that the site was not secure at all and security measures
were recommended in the evaluation report that was prepared and submitted
to the Presidency and the DPW. In the opinion of Security Advisory Service,
the recommended measures would have been sufficient at the time to secure
the immediate safety of the President at his residence (i.e. before the

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construction of the three new residences). It was regarded as an "immediate
fix for an appalling situation".

6.60.14. At the time of this visit, the SAPS officials based at the residence stayed in a
building that belongs to the President. Due to the fact that the living
conditions of the SAPS officials were regarded as very poor and
unacceptable, it was recommended that the accommodation for the officials
should be upgraded.

6.60.15. Brigadier Adendorff further explained that there were discussions about the

upgrading of the Nkandla Police Station, which would have included barracks
where the SAPS officials assigned to the President's residence could be
accommodated. However, this plan never materialized and due to the fact
that no alternative accommodation is available in the area, accommodation
had to be constructed as part of the Nkandla project.

6.60.1 6. At the time of my site visit, it was established that the closest SAPS facility to
the President's residence is a satellite Police Station in the area with no
accommodation facilities that is managed by the SAPS in Eshowe.

6.60.17. Brigadier Adendorff further stated that the DPW was supposed, on receipt of
the Security Evaluation Report, to consider its recommendations, and to
design and cost the works accordingly.

6.60.18. She confirmed that there was a meeting of the SAPS and the DPW with the

President on the site in August 2009 where the planned security measures
were explained to him. The discussion was based on the security evaluation,
dated 28 May 2009.

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6.60.19. Security Advisory Services was subsequently informed of the three new

residences that were to be constructed by the President on the site. The new
residences had an impact on the security of the premises and a new
evaluation had to be done.

6.60.20. After the project commenced, Security Advisory Services became part of the

Project Team and regularly attended progress meetings on the site. At these
meetings, they made inputs in respect of the design of the security
measures.

6.60.21 . The second security evaluation conducted by Security Advisory Services was

presented to the Director-General of the DPW on 25 September 2010. It
contained more extensive measures that had to be implemented and the
scale of the Nkandla project increased substantially due to the President's
new residences and the accommodation that had to be constructed for staff
of the SAPS and the DOD. The fact that the President's private residence is
in a rural area also had an impact on the security measures that had to be
implemented.

6.60.22. I noted that the covering letter of this Security Evaluation Report, signed by
Maj Gen Kulu and addressed to the Director-General of the DPW and the
Presidency, under the heading: "SECURITY EVALUATION: ADDITIONAL
SECURITY MEASURES FOR THE NEW DEVELOPMENT:PRIVATE
RESIDENCE OF THE PRESIDENT: MR J ZUMA, NKANDLA KWA ZULU
NATAL" stated, inter alia, that:

"The owner/occupant is responsible for the implementation of this report to
ensure that the minimum standard of security is maintained. This office can
assist during the implementation phase ensuring that the correct standard is
achieved. "

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JCjLIC F>EO>TE<:.TOk

6.60.23. According to the security evaluation reports and Brigadier Adendorff's
evidence, the safe haven that had to form part of the security measures, was
a modest facility. Initially, the idea was that it would entail strengthening
certain rooms of existing buildings.

6.60.24. However, when the matter was discussed between her and Mr Makhanya, it
was agreed there should be a central safe haven facility that could be
accessed by the President from any one of the residences, at the time of an
emergency. Eventually, it was decided that the ideal would be to put the safe
haven where it is today.

6.60.25. Due to the age of some members of the President's immediate family and the
possible need to remove an injured person with a stretcher underground, it
was, according to Brigadier Adendorff, decided to provide lifts linked to all the
residences on the premises. Much of this input came from Mr Makhanya,
who was designing the features of the Nkandla project.

6.60.26. Brigadier Adendorff further stated that she was not involved in the
specifications of the air conditioning systems that were installed in the safe
haven, which can deal with different kinds of attacks. All that was required
was fresh air.

6.60.27. She conceded in her evidence that the safe haven could have been
constructed as the original modest facility, which would have cost much less.
She said she was surprised with the facility that was eventually constructed,
as it amounted to much more than what was required by the SAPS.

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6.60.28. Security Advisory Services required fire-fighting capacity on the site, but did
not prescribe what it should consist of. During discussions with the Project
Team, it was decided that a fire pool had to be built as a water reservoir.

6.60.29. Brigadier Adendorff further stated that the President complained about the
design of the bullet resistant windows that had to be installed in his dwellings.
Due to his request, the required design was changed. The President's
concern was confirmed by himself and other witnesses interviewed. In
essence he did not want a place that reminded him of prison.

6.60.30. She explained that the new Tuck Shop also had to be fitted with bullet
resistant windows as it forms part of the outer perimeter fence of the site.

6.60.31. The perimeter fence had to enclose the whole precinct due to the fact that
the President could be anywhere on the site at any time.

6.60.32. Brigadier Adendorff further stated that she was not aware of the provisions of
the Cabinet Policy that regulates the security measures to be taken at the
President's private residence at the time of the implementation of the
Nkandla Project. No indication could therefore be provided whether the
procedure prescribed by the Policy was complied with by the SAPS, the
DPW and the Minister of Police. According to her, NIA (State Security
Agency) was not involved in the Nkandla Project, as prescribed by the Policy.

6.60.33. She also indicated that the Interdepartmental Security Coordinating
Committee did not consider the measures that were implemented at the
President's private residence.

6.60.34. Certain aspects of the security of the premises, such as the security of the
Tuck Shop and the fire-fighting measures, were not covered in detail by the

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Security Evaluation report. According to Brigadier Adendorff, it was left to the
designers of the Nkandla project to deal with.

6.60.35. She also stated that as far as she is aware, the SAPS was never provided
with a cost estimate of the Nkandla project. The SAPS did not make any
payments in respect of the project as it was regarded as the responsibility of
the DPW.

6.60.36. The Acting Chief of Staff of the Ministry of Police provided me with limited
access to the copy MPSS during the course of the investigation.

6.60.37. I could find no indication in Brigadier Adendorff's and Maj General Kulu's
evidence that they were aware of the fact that the President's private
residence was declared a National Key Point by the Minister of Police on 8
April 2010.

6.60.38. In fact, Maj Gen Kulu stated in this regard that:

"Whether or not the security upgrades were to be implemented and installed
in terms of the Cabinet Policy of 2003, and whether they were implemented
in terms of the said Cabinet Policy fell outside my scope of work, and that
question cannot be addressed to me. The same applies to whether the
National Key Points Act, 1980 required the President to pay for the security
upgrades. That question must be addressed to DPW as the implementing
agent. "

6.60.39. Brigadier Adendorff was adamant in her evidence, that according to her, the
SAPS did apply a proper demand management process as far as its
requirements for the Nkandla Project was concerned. In this regard, she

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referred to the two Security Evaluation Reports prepared by her. She also
persisted in her view that the SAPS had nothing to do with the procurement
process and was not responsible for determining the costs of the Nkandla
Project as it was all the responsibility of the DPW. The SAPS, according to
her, had no role to play in determining whether the project or any part
thereof, was affordable. In this regard she stated specifically: "It should be
kept in mind that the security relates to the Head of State." However, she was
aware of the fact that the DPW would recover the relevant portion of the cost
that relate to its requirements from the SAPS.

6.61. The Tuck Shop

6.61.1.1 It is common cause that at the time when the SAPS conducted its first
security evaluation at President Zuma's private residence, one of his
immediate family members was running a small tuck shop business in a
small rondavel structure on the premises. According to the evidence and
information obtained during the investigation, she had owned this small
business for many years, prior to Mr Zuma being appointed as President.

6.61.1.2 The first SAPS Security Advisory Service Evaluation Report stated in this
regard that:

"In order to achieve a safe and secured environment within the premises, the
existing tuck shop must be relocated from the present position to enable the
police personnel to maintain proper access control. A new hut (tuck shop)
must be built closer to the perimeter protection to enable people to buy while
outside the premises. When this is built, the proposed security measures
must be taken into consideration."

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6.61.1.3
6.62.

6.62.1.1

6.63.
6.63.1.

6.63.2.
6.63.3.

Mr Rindel explained in his evidence during the investigation that, according to
him, the person who owned the tuck shop could not be deprived of her
business simply because the DPW had to install security measures at the
President's private residence. Accordingly, it was decided to relocate the tuck
shop to form part of the perimeter fencing, as required by the SAPS.

I observed during my site visit that the new Tuck Shop consists of a small
room, at the entrance to the premises, which forms part of a larger building
that houses legitimate security items. From the records of the DPW, the total
structure, including the security equipment housed in the building cost
R956 381.16.

According to Mr Rindel, the cost of the building only amounted to
approximately R505 000

The Relocation of the cattle kraal

During my site visit on 12 August 2013, Mr Makhanya explained that the
original kraal where the President's livestock were kept had to be relocated
for security reasons. According to him, its original location would have
caused interference to the intruder detection systems. However, the original
location could not be indicated.

When I met with the President on 11 August 2013, he indicated that he
requested the building of the kraal as the number of his cattle had increased.
He also stated that he would be willing to refund the state for the cost
incurred in this regard.

I noted that the new kraal has an elaborate design that separate facilities for
goats, cattle and chickens. It is also linked to an area outside of the perimeter

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fence by means of an access tunnel (culvert) with a gate that is remotely
controlled. Having been to Qunu, the rural residence of former President
Mandela, I noticed the difference in the kraals.

6.63.4. Mr Makhanya could not explain who was responsible for the ideas that
resulted in his design of the new kraal. However, during the inspection in
loco, he advised on the culvert and chicken run, that "this is how it's done in
England."

6.63.5. Brigadier Adendorff explained during the investigation that although it was
not mentioned in the SAPS Security Evaluation Reports, the culvert was
designed and constructed to "prevent cattle from causing false alarms of
electronic systems on fence. "

6.63.6. According to the records of the DPW, the construction of the new kraal was
included under general site works. It was noted from the records of the DPW
that the cost estimate of the construction amounted to R1 .2 million.

6.64. The Swimming Pool, Visitors Centre and Amphitheatre

6.64.1 . According to Mr Rindel's evidence, it was a requirement of the SAPS and the
DOD that a reservoir, had to be installed as part of the Nkandla Project to
ensure that adequate water is available in the event of a fire. Running water
is not readily available at Nkandla and there is no nearby municipal fire
brigade. The idea was to have a fire truck on the premises that could be
filled from the water reservoir. Fire-fighting capability was also regarded as
necessary due to the fact that the President is transported to his private
residence by helicopter. The evidence shows that ultimately, the swimming
pool in addition to the water reservoir was constructed.

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6.64.2. In her evidence, Deputy Minister Bogopane-Zulu stated that during her
involvement, she supported the idea of the possibility of building a swimming
pool, which could be used as a water reservoir and at the same time be
utilised to teach children of the Nkandla community to swim. She planned to
get Swim South Africa involved to teach and train children. However, she
was removed from the project before her idea could be further considered.

6.64.3. It transpired from the investigation that what initially was supposed to be a
fire-pool (water reservoir) was converted into a swimming pool. Mr Rindel
explained that it was decided that as it was a requirement to have a fire-pool,
to make it aesthetically pleasant as well by building it in the form of a
swimming pool.

6.64.4. The Motivations and Cost Allocations Document prepared by R&G
Consultants on 1 1 March 201 1 indicate that the costing of the fire-pool was
combined with the cost of parking facilities that had to be built and the
motivation for these items was stated as follows:

"i) Fire pool is a ground water storage facility intended for dual purpose. First
to be used for firefighting in case of emergency. The second use is
recreational within the homestead. Note: open surface water compared
with reservoir storage is easily accessed in case of emergency.

ii) Parking garage is provided in limited space closer to the dwellings
dedicated for VIP cars for the principal and first lady , "(emphasis added)

6.64.5. The total cost of the swimming pool and parking garage referred to above
amounted to R2 819 051.66. Mr Rindel indicated during the investigation that
the parking garage for VIP cars was required by the SAPS. I noted that this
was not included in the SAPS Security Evaluation Reports.

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6.64.6. According to the records of the DPW the Visitors' Centre also houses a

legitimate security feature that was identified as necessary in all the security
evaluations conducted. However, the security feature occupies a small part
of the double story building that boasts a large visitors' lounge with a sizeable
balcony overlooking the swimming pool and a paved terrace. One of the
witnesses interviewed during the investigation stated that the Visitors Centre
was a requirement of the Presidency. I approached the Director-General of
the Presidency in this regard in writing on 26 August 2013, and when I finally
met him in December 2013 he advised that he was not aware of any
involvement of that nature from the Presidency.

6.64.7. Brigadier Adendorff stated in her evidence that the Visitors' Centre was not a
requirement of the SAPS, "but was identified to be used as a holding area to
allow for screening and processing of a large number of visitors. ".

6.64.8. Mr Rindel stated that he was aware that the Visitors' Centre was not required

by the SAPS Security Evaluation Reports. However, it was indicated by the
SAPS during the implementation of the project as a requirement "to stop
people from moving over the site unattended." It was designed by Mr
Makhanya.

6.64.9. I noticed during my site visit that the swimming pool forms part of an area

close to the Visitors' Centre that also includes an amphitheatre, which can
easily accommodate about 100 people, and a lawn area that was flattened
during the landscaping process to accommodate a marquee tent. My general
impression was one of an enormous entertainment area that has very little
connection with issues of security. The answers I got, particularly from the
officials that participated in the inspection in loco, confirmed this conclusion
as they kept saying they had to take into account an aesthetic fit to the

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stature of a President and the President's needs when hosting guests. They
also kept saying the approach was not different from that taken in official
presidential residences.

6.64.10. Mr Makhanya explained during the site visit that the fire extinguisher
equipment on the site was connected to the swimming pool so that its water
could be used by the force of gravity in the event of a fire. However, he could
not provide a satisfactory explanation why a water reservoir, similar to the
one that was installed for household use would not have sufficed. It was also
unclear why the same one did not suffice.

6.64.1 1 . He further submitted that the construction of the swimming pool also required
the building of a retaining wall as the large amount of water it holds would
pose a risk of flooding due to the slope on which the residences are located.
It also resulted in landscaping interventions that had to be implemented to
deal with the risk of storm water.

6.64.12. It was explained by Mr Makhanya and the Landscape Architects during the
investigation that, according to them, the amphitheatre had a dual purpose.
The lay of the land and the construction of buildings during the project
necessitated landscaping interventions to deal with storm water and soil
erosion. As retaining walls and other methods had to be constructed, it was
decided to construct it in such a way that the area concerned could also be
used as an amphitheatre for functions.

6.64.13. However, it was obvious during the site visit that it would not be
unreasonable to assume that less expensive and elaborate measures could
have been taken to deal with the storm water containment. Mr Rindel
confirmed during the investigation that no attempt was made to consider a
comparison with less expensive landscaping methods.

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6.65. The relocation of households of neighbours

6.65.1. Mr Rindel explained during the investigation that four traditional households
had to be relocated due to the fact that their residential buildings were
obstructing the new perimeter fence that had to be built as part of the
Nkandla Project, as advised by the SAPS. Incidentally, this was never
mentioned in the two SAPS Security Evaluations. As indicated earlier, no
other SAPS evaluation was conducted.

6.65.2. The legal team assisting the President during the investigation indicated in its
presentation on the President's submissions, dated 14 February 2014, that
these households are not part of the Zuma family and not dependent on the
President.

6.65.3. During my site visit, Mr Makhanya explained that the perimeter fence could
not be built around the dwellings of the affected households as it would have
impacted on the security of the fence and the detection systems that had to
be installed. No answers were provided as to why the option of a National
Key Point Precinct was not considered. In that option, the affected
households would have remained in the enclosure.

6.65.4. It appears though that the concern recorded in the motivation documents was
not the meandering fence but rather a concern raised by consultants
regarding the proximity of the households. A clue in this regard can be found
in the cost estimate documents of R&G Consultants, which describe the
motivation for the relocation as follows:

"A total of 4 households were found to be too close to the principal's
homestead when considering safety distances and necessary stand-off

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distances for potential threats. It was therefore necessary to relocate 4
households." (emphasis added)

6.65.5. Each of these households consisted of a number of rondavels, two small
structures used as kitchen and toilet facilities, and a kraal for farm animals.

6.65.6. According to the evidence and information obtained, the affected families

were initially reluctant to move, but after Deputy Minister Bogopane-Zulu had
discussed the matter with President Zuma, she initiated dialogue with them
and they eventually agreed, on condition that their households were replaced
with proper buildings. Deputy Minister Bogopane-Zulu indicated that the
affected persons are extremely poor and was staying in dilapidated buildings.
During the site visit we were not allowed to visit those families and were
advised that there was unhappiness about the relocation.

6.65.7. The said households were relocated to land outside of the new perimeter

fences. Mr Rindel further explained, during the investigation, that due to the
requirements of Building Regulations, which the DPW has to comply with, the
buildings of the affected households had to be replaced with proper brick and
mortar structures that complied with the applicable standard. No information
was provided on the legal or policy authority to effect and fund such
relocation.

6.65.8. Deputy Minister Bogopane-Zulu indicated in her evidence that she suggested

that the DPW enquire from the Department of Human Settlements whether
the affected persons qualified for RDP Housing. The response that she
received was affirmative, but that it would take a long time for houses for
them to be built under that programme. Under the circumstances, the DPW
went ahead and relocated the four households.

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6.65.9. It was also pointed out during my site visit that it would have been
unreasonable to replace all the buildings of every household with one RDP
house each.

6.65.10. During the investigation, it was established that the floor space of a typical

RDP house is about 40m 2 . According to the Centre for Affordable Housing
Finance in Africa, it costs between R100 000 and R200 000 to build an RDP
house, depending on the area and infrastructure that is available, (see:
www.housingfinanceafrica.org)

6.65.11. The DPW documents indicated that it was effectively three and a half

households that had to be relocated. One of the households affected already
had an existing building in the area where they moved to, hence it was
regarded as half of a relocation.

6.65.12. The total floor space of the households that had to be relocated that had to

be constructed to put them in the same position in respect of their
accommodation amounted on average to 306m 2 per household. It was
therefore much larger than the average RDP house.

6.65.13. Substantial earth and site works also had to be done to relocate these
households due to the slope of the land.

6.65.14. The records of the DPW show that the new structures built for the

households included items such as electricity and water installations and
connections, sewerage connections, built in cupboards, roads, fences paving
and a kraal for every household. The total number of buildings that each
household consisted of was replaced in each case. Linking the houses to the
electrical and water infrastructure also added to the expense.

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6.66.
6.66.1.

6.66.2.
6.66.3.

6.67.
6.67.1.

The total cost of the relocation of the four households, including the
demolition of their old houses amounted to R7 921 517.44.

Roads, Paving and Walkways

From the records of the DPW it was established that roads, walkways and
paving in the amount of R12 826 158.04 were constructed at state expense
as part of the Nkandla Project.

The roads included an access and patrol roads as well as the road from the
dwellings to the helipads.

During my site visit, I noted that the paved roads are rather wide in certain
areas to the extent that two cars can easily pass each other. It could not be
explained why it was necessary to build paved roads of such an elaborate
nature at a private residence. It was also noted that the areas around the
entrance gate and swimming pool was extensively paved, whilst the
reasoning for such measures could not obviously be linked to issues of
security.

Safe Haven

As already indicated, the SAPS required the construction of a safe haven for
the protection of the President in an emergency. Despite the original
recommendation by SAPS requiring a very modest structure costing about
half a million Rand, the facility that was eventually built ended up being more
elaborate and initially cost about R8m with DPW having paid according to the
DPW records, R19 598 804, by the time this investigation was concluded.

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6.67.2.

6.68.
6.68.1.

6.68.2.
6.68.3.

The records also show that more essential work still needed to be done at an
additional cost.

Mr Rindel indicated in his evidence that the discussions relating to the
placing of the safe haven underground instead of on the surface took place
between the SAPS and Mr Makhanya.

Staff Accommodation:

Mr Rindel and Brigadier Adendorff explained during the investigation that it is
a requirement that the President's private residence is always protected by
members of the SAPS. When he visits the residence, the accompanying
protectors and staff members of the DOD responsible for the transportation
and medical care of the President also require accommodation. It was
therefore, according to them, necessary that the bachelor flat units had to be
constructed to accommodate these staff members as there is no alternative
accommodation in the area, due to its remote rural location. The total cost of
this accommodation, which included a laundry facility was R17 466 309.67.

During our site visit, we noted that all the units were not ready for occupation
and that some of the staff members were still staying in the park homes
installed as temporary accommodation. Mr Makhanya said the final
completion of the units was suspended due to the investigations on the
Nkandla Project.

We also noted that each of the units consists only of one room, including an
area for a kitchen, and a small bathroom and that it is not fit even for a small
family.

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6.68.4. When engaged about the future of the R17 million settlement, the answers
suggested that no one had thought that far when the investment was made.

6.69. Further Comments from the Deputy Ministers

6.69.1. Deputy Minister Bogopane-Zulu

6.69.1 .1 Ms H Bogopane-Zulu served as the Deputy-Minister of Public Works from 1 1
May 2009 to 24 October 2011. Currently, she is the Deputy Minister of
Women, Children and Persons with Disability.

6.69.1.2 When she was interviewed during the investigation, Deputy Minister
Bogopane-Zulu explained that at the time of her appointment as the Deputy
Minister of Public Works, she had nothing to do with the Prestige Portfolio of
the DPW under which the Nkandla project was implemented.

6.69.1.3 She only got involved in the Prestige Portfolio from 15 November 2010 to 7
March 2012 by means of a delegation of responsibility by the "new" Minister,
Ms G Mahlangu-Nkabinde.

6.69.1.4 Deputy Minister Bogopane-Zulu understood the delegation to mean that she
had full authority over the Prestige Portfolio and had to brief the Minister on
her involvement.

6.69.1 .5 However, this was denied by former Minister Mahlangu-Nkabinde that stated
during her interview that the Deputy Minister was actively involved in the
Nkandla project at the time that she took office on 1 November 201 and that
she was reporting on it directly to the Presidency. I raised this with the
Director-General of the Presidency on 26 August 2013, but he could not

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confirm it. Deputy Minister Bogopane-Zulu also denied this and provided me
with a copy of her delegations from former Minister Doidge, which did not
include the Prestige Portfolio. She also denied that she reported to the
Presidency on the Nkandla Project

6.69.1.6 This evidence of Minister Mahlangu-Nkabinde was inconsistent with records
of the DPW that indicate that the Deputy Minister was only introduced to the
Project Team and her involvement explained on 30 November 2010.

6.69.1.7 Deputy Minister Bogopane-Zulu confirmed in her evidence that she
requested the officials of the DPW to brief her on the Nkandla Project at the
President's private residence. She then visited the site of the project on 30
November 2010 together with the Project Team. From the time of her
involvement, she was chairing the Progress Meetings.

6.69.1 .8 Her first observation was that the project was far behind schedule. One of the
issues stalled at the time was the relocation of the households whose
residences were obstructing the construction of the new security fence
around the precinct. Others were the delay in the manufacturing of the
perimeter fence and the installation of bullet resistant glass in the President's
private dwellings. Very limited security was in place at the time and she also
found the living conditions of the SAPS staff that were stationed at the
residence to be very unsatisfactory.

6.69.1.9 The Deputy Minister requested a further meeting to be held with the Project
Team on 3 December 2010. She discussed the context of several issues,
such as the accommodation of the SAPS, the Military Clinic and the helipads
with the main contractors and addressed the expedition of the project.

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6.69.1.10 She wanted to ensure that the helipads could be used by civil aviation after
the President's term expired and therefore requested the involvement of the
aviation authorities.

6.69.1 .1 1 The next meeting that she attended was on the 7th of December 2010. The

financial issues of the project were discussed. She also requested to be
informed by the meeting whether the President was briefed on the Nkandla
Project on what was happening at his private residence. The response that
she received was that the President was supposed to be briefed by the DPW
and Mr Makhanya.

6.69.1.12 Deputy Minister Bogopane-Zulu stated that she raised her concern in this

regard with the Minister of Public Works because it was her understanding
that the implementation of the Nkandla project involved shared cost, i.e. that
certain items would have to be paid for by the President and that he should
be informed accordingly in advance so that he could indicate whether it was
acceptable to him.

6.69.1.13 When she eventually met with the President in December 2010, he
complained about the delay in finalizing the project.

6.69.1.14 She briefed the President on the project and he explained his unhappiness

about a number of issues relating to the security measures. The President
specifically complained about the nature of the bullet resistant windows,
which reminded him of the time of his incarceration.

6.69.1.15 Deputy Minister Bogopane-Zulu informed Brigadier Adendorff and Lt Gen
Ramlakan, that the President wanted to discuss the matter with them. She
did not attend the meeting, but was subsequently informed that the President
had raised his dissatisfaction over the bullet resistant windows.

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6.69.1.16 Deputy Minister Bogopane-Zulu also raised the relocation of certain

households with the President. His response was that he has known the
people involved all his life. She arranged a discussion with the affected
people who indicated that they were willing to move on condition that the
State should provide them with housing. They are very poor and their
rondavels were falling apart.

6.69.1.17 She requested officials of the DPW to enquire from the Department of

Human Settlements whether the persons concerned qualified for RDP
Housing. The response was that they do qualify, but that the process would
take long. In the mean-time, houses had to be built for them as they could not
be left without accommodation. She was removed from the project before
she could ensure that this initiative was taken further.

6.69.1.18 She also considered the initial designs of the Military Clinic, which according

to her observations was too small. As the community in the area does not
have a clinic, she suggested to the project team that she would discuss the
matter with the Minister of Health and the President to find out whether it
"would be okay that the clinic also serves the community." Her idea was
referred to a "clip-on" facility.

6.69.1.19 Lt Gen Ramlakan was opposed to the idea. However, she discussed it with

the President. He stated that he wanted the community to benefit. According
to her, President Zuma said: "If they give you grief, tell them they must come
and talk to me."

6.69.1.20 The Deputy Minister consequently informed the Project Team that she had
obtained approval from the President that the clinic must serve the

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community. The associated security issues had to be considered and
designed.

6.69.1 .21 She then discussed her idea with the Minister of Health who indicated that he
would consider the matter. She further requested the Project Team to ensure
that the community component of the clinic not be paid for under the security
project of the DPW.

6.69.1.22 As far as the supply of water for fire-fighting emergencies was concerned,
Deputy Minister Bogopane-Zulu suggested that should a swimming pool be
built, children in the community could be taught to swim. She requested that
a cost comparison between a static water reservoir and a swimming pool be
made and was informed that it amounted to R50 000. She discussed this with
the President, and he agreed. She also said Swimming South Africa was also
contacted in this regard.

6.69.1.23 It was emphasized by Deputy Minister Bogopane-Zulu in her evidence that
she also made suggestions regarding the sharing of electricity connections
and the construction of a waste management facility with the community in
the immediate area of the President's residence. However, none of her
developmental ideas were eventually implemented.

6.69.1.24 At a progress meeting with the Project Team she requested an
apportionment of cost document to be prepared on what had already been
implemented and also in terms of the estimated cost of what still had to be
implemented, to enable her to discuss the matter with the President. This
was because she was informed that it was a "shared cost project' .

6.69.1.25 She indicated during her evidence that it took a very long time for the
document to be compiled. Due to her removal from the project, she never

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had an opportunity to discuss the contents of the document with the
President and does not know whether it was ever submitted to him.

6.69.1.26 The Deputy Minister was not aware of the Internal Memorandum relating to

the apportionment of costs, addressed to the Minister of Public Works by Mr
Khanyile on 28 March 201 1 , as by that time she had already been removed
from the Nkandla Project. Former Minister Mahlangu-Nkabinde denied during
the investigation that she ever saw this document and indicated that she was
not involved in any discussions of considerations in regard to the
apportionment of costs. Mr Rindel could not explain why it did not reach the
Minister or Deputy Minister as he personally hand delivered the document at
DPW head office.

6.69.1.27 Deputy Minister Bogopane-Zulu further explained that after the progress

meeting in February 2011, she attended a conference in New York. On her
return on 1 1 March 201 1 , she was informed directly and in writing by Minister
Mahlangu-Nkabinde that she was removed from the Prestige Portfolio. She
approached the Minister and asked her for the reasons for her removal, but
the Minister refused to discuss the matter with her.

6.69.1.28 When I discussed this with her during the investigation, Ms Mahlangu-

Nkabinde only confirmed that officials of the DPW raised certain concerns
with her about the Deputy Minister's involvement in the Nkandla Project and
that she had discussed the matter with her. Deputy Minister Bogopane-Zulu
denied that Ms Mahlangu-Nkabinde discussed the matter with her. However,
she stated that rumours of discontent among officials did reach her informally
upon her arrival from New York, "but these were understood to have been
unhappiness that my persistent insistence on driving costs down did not sit
comfortably with some officials."

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6.69.1 .29 During her interview, Deputy Minister Bogopane-Zulu confirmed that she also
signed the letter of Minister Mahlangu-Nkabinde addressed to the President
on 5 November 2010, providing him with a progress report on the Nkandla
project.

6.69.1 .30 When she was afforded the opportunity, in terms of section 7(9) of the Public
Protector Act, to respond to the information and evidence obtained during the
investigation that may appear to implicate her, Deputy Minister Bogopane-
Zulu further explained her involvement in the Nkandla Project, inter alia, as
follows:

"The Department of Public Works implements infrastructural developments
including acquisition of properties for and on behalf of various national
departments. It happens in some instances that implementation of a prestige
project falls behind schedule or the expenditure soars to unpredicted levels.
The Minister may in appropriate circumstances deem it fit and imperative that
there should be Executive intervention and oversight in order to unlock
whatever delays there can be in the implementation of a project and to
control an arrest escalating costs. Implementation of a security upgrade at
the President's house in Nkandla was running behind schedule and there
was concern over the mounting cost; hence political intervention became
imperative.

I participated in project team meetings (including site meetings) to familiarise
myself with the challenges cause by the significant delays as well as cost
escalation on the project, and which resulted in the need to strengthen
political oversight, so as to enable me to provide leadership;

I provided leadership in these meetings by exploring alternatives which could
be considered to bring costs down, to accelerate implementation and to

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extract more value for money by looking at possible ways the surrounding
communities could benefit from the public investment. I also requested an
apportionment of cost between the state and the property owner, and raised
concerns with regards (sic) significant challenges with the overall
management of security on the project.

I at no stage issued any directives with regards either (sic)
changing/expanding the scope of work or the procurement process to be
followed.

I did not play a part at all in the nomination and appointment of service
providers to provide services in the Nkandla Project at the inception or during
its continuation. "

6.69.1.31 Deputy Minister Bogopane-Zulu referred to the appointment of contractors
for phase 2 of the Nkandla Project as follows:

"/ did not influence the further appointment of the contractors to remain on
site to carry out works in Phase 2 of the construction. I submit therefore that
the propriety or otherwise of the retention of the service providers for Phase 2
of the project shall be based on the first appointment and not on the
comments I am alleged to have made. The Public Officials concerned were
not influenced by my comments at all and they were going to retain the
service providers on the same basis on which they appointed them in the first
place. "

6.69.1.32 The Deputy Minister denied that her involvement crossed the line between
providing political leadership and interfering with administrative processes.
She stated that:

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"In my view that the difference between political leadership and political
interference can be explained as follows:

Political leadership focuses on providing strategic direction, including
intervening where processes and projects have been red-lined as in trouble,
without interfering with administrative decision-making processes.

Political interference in contrast occurs when an Executive Authority acts,
hinders, obstructs, or impedes delivery, and/or issues instructions and
directives which are administrative in nature, including the process of
procurement. "

6.69.1.33 The Deputy Minister also denied that she reported on the Nkandla Project
directly to the Presidency.

6.70. The Appointment of a Private Project Manager

6.70.1. The minutes of a meeting of the RBAC held on the 17 September 2010
indicate that the appointment of a private Project Manager by means of a
nominated procurement process was approved. Ramcon Project
Management Services was subsequently appointed. At the time, Phase 1 of
the Nkandla Project was already underway and the design stages were
complete. The appointment was shortly after Minister Doidge became
involved in the project.

6.70.2. Mr R Samuel, former Deputy Director-General of the DPW, indicated in his
evidence that it was decided to appoint a private Project Manager as it was
clear that the DPW Project Manager was struggling and that there were
serious delays in finalizing the implementation of the Nkandla Project.

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6.70.3. Mr Rindel, agreed that there was a need to appoint a private Project Manager
to manage and coordinate all the different aspects of the Nkandla Project on
the site. He explained that due to the fact that he is based in Durban, it was
not possible for him to manage every aspect of a project of this scale, on a
day to day basis.

6.70.4. During the investigation, Ramcon's manager stated that its brief was to
manage the different phases of the implementation of the Nkandla project as
far as construction was concerned.

6.70.5. The role of the private Project Manager was to assist the Project Team with
the management and coordination of the different construction processes
that were taken place at the same time on the site. It also had to ensure the
management of quality control and compliance with design specifications by
the professional team involved and compliance with deadlines.

6.70.6. Mr Rindel was providing direction and guidance as the client and taking
major decisions in respect of the Nkandla Project.

6.70.7. At the time when Ramcon got involved there was a substantial amount of
coordination that had to be done as the project was fast-tracked. The project
was not well managed and already experienced serious delays in terms of its
set deadlines. "There were a lot of struggles" .

6.70.8. Ramcon together with the rest of the project team provided presentations on
the progress made to the regular progress meetings, some of which were
chaired by the Minister or Deputy Minister of Public Works.

6.70.9. According to the DPW records, the total amount paid to Ramcon by the DPW
by the end of the investigation was R5 092 477.73.

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6.71. Landscaping

6.71.1. Messrs Rindel, Makhanya and Crafford explained during the investigation
that the construction works that had to be implemented on the premises
resulted in a rigorous intervention of the landscape and vegetation that had to
be rehabilitated, to bring the site back to normal. This included that attention
had to be given to the flow of storm water due to the steep lie of the land.

6.71.2. According to them, it was therefore necessary to employ the services of a
Landscape Architect to design the landscaping works that were required. Uys
and White Landscape Architects were appointed as a subcontractor to the
Principal Agent (Mr Makhanya) during the beginning of 2010, with the
approval of the DPW.

6.71.3. The relevant architects of Uys and White involved in the Nkandla Project
were interviewed during the investigation. According to Mr Uys, his firm had
previously been involved in security projects, such as the Hoedspruit Air
Force Base.

6.71.4. Most of their brief in respect of the Nkandla Project was given to them
verbally by the DPW and Mr Makhanya at briefing meetings on the site. It
related mainly to environmental control (storm water) and the replacement of
facilities, such as the vegetable garden and the relocation of the kraal.

6.71.5. The visual access to the site, for example by a sniper, also had to be
considered in respect of the kind of vegetation that was used and the landfill
that had to be applied in the design of the landscape.

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6.71.6. Initially, Mr Crafford considered and approved their designs, but as the
project was implemented on the ground, the supervision and liaison were
mainly done by Mr Makhanya.

6.71 .7. At the time when the Landscape Architects got involved on the site, extensive
construction works in terms of buildings and roads had taken place and the
site was, according to them, extremely eroded. It required substantial land
rehabilitation and in some cases retaining walls and banks to deal with storm
water drainage. It also included seeding, vegetation and the planting of
lawns. Lawns were planted as it is the cheapest way of controlling soil
erosion.

6.71.8. There was no environmental legislation that the Nkandla Project had to
comply with in the process of the design of the landscaping. A professional
opinion was obtained in this regard.

6.71.9. The initial master plan design of the Nkandla Project in respect of
landscaping was, according the Landscape Architects, substantially reduced
due to the costing. However, the main footprint of what had to be done
remained the same. The original estimated cost of the landscaping was
about R19 million. The actual final cost was much lower.

6.71.10. Mr Uys and his colleagues indicated during their evidence that much of what
was originally designed in terms of the landscaping, was not implemented,
such as the pergolas, light fittings, and feature elements. They expressed the
view that all those things that would have made the site "special" and created
an ambiance of being "stately" were excluded.

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6.71.11. According to Uys and White Landscape Architects, the following table
represents a comparison between the planned landscaping and what was
actually implemented:

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Forecast based on costing
Revision no 7

Actual certified to date ■
Phase 1 - Bonelena

Actual certified to date - Phase
2 Money Mine

Preliminary & General

R 430 000.00

R 139 120.00

Zone A: Arrival Node

R 532 250.00

R 120 488 30

VISITORS CENTRE

R 1 315 425.00

R 330 670.14

SOCIAL NODE

R 2 063 340.00

R249 157.01

RESIDENTIAL ARRIVAL

R 1 232 820.00

R 114 670.16

ZONEC: DWELLINGS

R 4 466 400.00

R 437 551.06

EXISTING HOMESTEAD

R 398 400.00

FACILITIES - Military Clinic
etc

R 283 850.00

R 16764.00

RING ROAD

R 585 400.00

R 480 601.00

REHABILITATION

R 2 475 875.00

R 216 680.87

Forecast based on costing
Revision no 7

Actual certified to date -
Phase 1 ■ Bonelena

Actual certified to date • Phase
2 Money Mine

HELIPADS

R 135 000.00

CEREMONIAL ROUTE

R0.O0

POLICE RESIDENCE

R1 312 546.00

R 1 758 769.78

OTHER

R 3 872 010.00

MAINTENANCE

R227 681.25

R 208 769.00

IRRIGATION

R44 971.04

EXTRAS & REPLACEMENTS

R 51 3 728.36

Extra from Bonelena
contract completed by
Money mine

R 67 662.22

Total Prolect

R 18 673 316.00

R 2 964 714.25

R 2 392 569.94

Total Prolect

Planned
R 18 673 316.00

Actual
R 5 357 284.19

UYS & White - Total certified
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6.71.12. As far as the apportionment of costs for landscaping perspective is
concerned, there were in the view of the Landscape Architects no "nice to
have's" that had to be paid for by the State. Where such items were included
it came about because of the view that it was a prestige project and the
President's house.

6.71.13. However, Ms Pasley, the DPW's Chief Quantity Surveyor and other officials
of the DPW interviewed during the investigation, held the view that the nice to
have's had to be paid for by the President if he wanted them. The Landscape
Architects indicated during the investigation that they accepted that the
President would be consulted on this, but were never informed whether the
President actually wanted those items and consequently, it was taken out of
the implementation. It should be noted that there was initially no discussion
on the separation of the costs of the Nkandla Project.

6.71.14. As far as the contents of the letter from Mr Khanyile addressed to the
Minister of Public Works on 28 March 201 1 referred to above are concerned,
the Landscape Architects explained during the investigation that their master
plan was broken down into zones.

6.71.15. The reference to the "social node" in the said letter related to an area that
was flattened to a space that could be utilized for a marquee tent.

6.71.16. The documents obtained from the Landscape Architects in this regard
indicate that the brief in respect of the social node was to: "create function
area linked to swimming pool terrace." Mr Rindel explained that the
discussions that took place among the officials in this regard indicated that
the amphitheatre and terraced pavilion could be used for functions "for which
the NDPW (National DPW) would also be responsible."

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6.71.17. According to the Landscape Architects, there was a very negative level
difference between the social node and the visitor's area. A terrace seated
zone was created as the best way to connect the spaces. It was their
suggestion to create the so called "amphitheatre", which was actually a
series of retaining walls, to break up the level differences.

6.71 .1 8. Throughout their involvement in the project, the Landscape Architects got the
sense that Mr Makhanya was keeping the President informed of
developments and that he submitted their drawings to him. Mr Rindel
confirmed that Mr Makhanya and Deputy Minister Bogopane-Zulu reported to
the Project Team that they had discussed the landscaping with the President.

6.71.19. They further explained that their landscape designs were implemented by
two contractors, i.e. Moneymine and Bonelena.

6.71.20. According to their explanation, the total measurement of the site that had to
be subjected to landscaping interventions was 6.1 hectares, which can be
converted into 8.6 international soccer pitches.

6.71 .21 . The total amount of Uys and White's professional fees was R1 974 457.37. It
was based on the professional fee guideline of the South African Council for
the Landscape Architectural Profession and calculated on drawings in
respect of the original project value of R18 673 316, and not on what was
actually implemented.

6.71 .22. The actual total cost of the landscaping was as follows:

R 5,357,289.96

R 1,974,457.37

TOTAL

R 7,331,747.33

Figure 1 1: Total Cost of Landscaping in the Nkandla Project

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6.71.23.

6.72.
6.72.1.

6.72.2.

6.72.3.
6.72.4.

During my site visit on 12 August 2013, I noted that substantial landscaping
works had been performed on the premises. As indicated above, the amount
of paving, retaining walls and the so called social node or entertainment area
specifically stood out as items that probably required better consideration in
terms of alternative and more cost effective measures. It was also noted that
the kraal that was constructed included separate areas for goats and cattle
and even chicken nests and a culvert with a remote controlled gate. As I
have already stated, Mr Makhanya could not explain whose idea the design
was and whether alternatives were considered.

The Apportionment of Costs

As indicated earlier in this report, Deputy Minister Bogopane-Zulu stated in
her evidence during the investigation that shortly after she got involved in the
Nkandla Project, she requested the Project Team to prepare cost
apportionment documents to be submitted to her.

The reason for her instruction in this regard was that she was told right from
the start that the Nkandla Project was "cost-shared", which, to her
understanding, meant that the President would be responsible for some of
the cost incurred during the project, due to the fact that it was implemented at
his private residence and that some items did not relate to security.

She explained that her intention was to discuss the apportionment of the
estimated costs with the President so that he was not later surprised by it and
could indicate whether or not he agreed with certain items.

Mr Rindel and other witnesses interviewed during the investigation confirmed
that a cost apportionment exercise was done with the inputs of the
professional team of consultants. They further stated that every item was

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debated and a decision then taken as to whether the estimated cost would be
for the DPW or the President or whether it should be shared and, if so, to
what extent.

6.72.5. From the records of the Department of Public Works obtained during the
investigation, it was found that R&G Consultants was requested to record the
cost allocations as agreed upon by the professional team in a document. This
document is titled: "DURBAN PRESTIGE PROJECT A: MOTIVATIONS AND
COST ALLOCATIONS" and dated 1 1 March 201 1 . It tabled the appropriation
of the estimated costs as follows:

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Safe Haven and Related Installations*

1 & 2

R 14,033,701.30

20 Residential Staff Houses and Laundry Facility

R 17,055,543.00

Relocation of Households

R 7,983,735.62

Military Clinic and Service area, Clip On & SAPS Garages

R 11,316,167.25

Visitors Centre with space for a Security Service*

R 7,562,141.06

Multipurpose security room also housing a Tuckshop

R 494,893.80

Guard House 1

R 2,293,801.31

Guard House 2 & 3

R 1,068,080.30

Crew Pavilion

R 1,633,298.00

Sewer Pump Station

R 616,138.00

Fire Pool and Parking

R 2,640,679.60

R 2,380,011.56

R 260,668.04

Sewer Treatment Plant

R 756,409.48

Booster Pump Station

R 382,337.13

Key installations to Private Residences

R 4,225,820.00

Key installations to existing Residences

R 315,000.00

Refuse area

R 1,715,000.00

Fire Truck Garage

R 365,000.00

Cattle Culvert

R 1,200,000.00

Temporary Mobile park homes

R 2,137,190.00

Stabilisation of existing SAPS park homes

R 37,158.00

Incoming Supply Power Upgrade and overhead Lines
Relocations

R 773,624.00

Reticulation during negotiated contract

R 55,000.00

R 10,000.00

R 45,000.00

Reticulation during Emergency Contract

R 701,621.60

Reticulation during Phase 2 contract

R 900,000

R 890,000.00

R 10,000.00

Standby Generator and Fuel Tank

R 661,219.00

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Security and Area Lighting

R 490,835.00

Lightning Protection

R 450,000.00

R 300,000.00

R 150,000.00

Temporary Generator

R 267,250.00

Outer Perimeter Fence

R 5,994,724.59

Inner High Security Core Fence

R 8,303,045.18

CCTV Camera Installation

R 1,885,000.00

Kinematic Fence Detection System

R 910,000.00

Fire detection

R 1,800,000.00

Fuel Trailer

R 460,000.00

Road 1

1 & 2

R 2,717,017.60

Road 2

1 & 2

R 622,810.18

Road 3

1 & 2

R 585,955.28

Road 4

1 & 2

R 455,616.30

Road 5

1 & 2

R 1,467,397.72

Road 6

1&2

R 710,595.58

Reticulation (Sewer, Water, Domestic, Fire Protection)

1 & 2

R 3,451,543.05

Steel Reservoir

R 290,894.45

Helipads

1 & 2

R 4,855,090.24

General landscaping around helipad

1&2

R 1,102,100.00

Builders work

1 & 2

R 1,200,000.00

R 1,190,000.00

R 10,000.00

Detailed Landscaping:

Zone A - Arrival Node

R 532,250.00

R 489,750.00

R 42,500.00

Visitors' Centre with space for Security Services

R 1,315,425.00

R 1,235,425.00

R 80,000.00

Social Node

R 2,063,340.00

R 884,655.00

R 1,178,685.00

Residential arrival

R 1,232,820.00

R 670,100.00

R 562,720.00

Zone C - Dwellings

R 4,466,400.00

R 1,166,236.00

R 3,300,164.00

Existing Homestead

R 398,400.00

R 231,400.00

R 167,000.00

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iOuni Hi men"

Facilities - Military Clinic etc.

R 283,850.00

Ring Road

R 585,400.00

Rehabilitation

R 2,475,875.00

R 1,975,875.00

R 500,000.00

Helipads

R 135,000.00

Ceremonial Route

Staff houses

R 1,312,546.00

Other

R 1,280,010.00

R 1,104,500.00

R 175,510.00

SUBTOTAL

R 135,024,749.62

R 128,542,502.58

R 6,482,247.04

ADD

Preliminaries

R 14,325,703.75

R 13,353,366.69

R 972,337.06

SUBTOTAL

R 149,350,453.37

R 141,895,869.27

R 7,454,584.10

Contingencies

2,423,637.52

2,200,000.00

223,637.52

SUBTOTAL

R 151,774,090.89

R 144,095,869.27

R 7,678,221.62

Pre Tender Escalation (3months @3.8% p. a) Applicable to
Lift and Security Values Only

R 2,293,115.02

R 2 293 115 02

1 1 C— j i— —J j -i- -I- — ' m \J t—

SUBTOTAL

R 154,067,205.91

R 146,388,984.29

R 7,678,221.62

Post Escalation (9 months @ 6.5% p. a)

R 4,506,465.77

R 4,281,877.79

R 224,587.98

SUBTOTAL

R 158,573,671.68

R 150,670,862.08

R 7,902,809.60

Professional fees calculated on pro Rata basis (18.23%)

R 28,907,980.35

R 27,467,298.16

R 1,440,682.19

SUBTOTAL

R 187,481,652.03

R 178,138,160.24

R 9,343,491.79

VAT @ 14%

R 26,247,431.28

R 24,939,342.43

R 1,308,088.85

TOTAL ESTIMATED CONSTRUCTION COST

R 213,729,083.31

R 203,077,502.67

R 10,651,580.64

Figure 12: Cost Apportionment for the Nkandla Project
*Wording modified to address security concerns

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6.72.6. According to Deputy Minister Bogopane-Zulu, she never received this

document due to the fact that she was removed from the Nkandla Project
subsequent to her request for it to be compiled. It appears the document has
disappeared without trace.

6.72.7. The findings contained in this document were conveyed to the Minister of
Public Works by Mr Khanyile in an Internal Memorandum addressed to her
on 28 March 2011, under the heading: "DISCUSSION OF
APPORTIONMENT OF COSTS BETWEEN STATE AND PRINCIPAL". The
aim of the memorandum was stated as:

"...to provide all the applicable information to Top Management in line with
the apportionment of cost between the State's responsibility and Private (cost
to the owner). "

6.72.8. The Memorandum indicated that the estimated scope of works was divided
as follows:

"Public (State) portion: R203 079 677. 18
Private (Owner) portion R10 651 580.64

The portion included under "Private" required additional attention before this
can be implemented as it falls outside the scope of security measures.
Please note that the implementation of some of these issues was
unavoidable and some had already been completed.

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It was agreed at that meeting that the Department cannot implement any of
the works included in the indicated above without the written instructions from
Top management to do the same. This is a precaution that must be taken as
the works falls outside the mandate given to the Department.

It is proposed that the works included herein be discussed between Top
Management and Ministry and guidance be given to the way forward with
these issues. It may be necessary to discuss these issues with the Principal
as the financial implication directly affects him (He may want to implement
these issues himself without the interference of the Department or else he
may want to opt to reimburse the Department after we complete the same .)

6.72.9. Mr Khanyile recommended in his memorandum to the Minister:

"• That the scope of works falling within the mandate of the Department
continues as previously instructed.
• That the scope of works apportioned to the Principal (the President) be
discussed and guidance be given to the Team pertaining on (sic) the
implementation thereof before construction will continue."

6.72.10. Minister Mahlangu-Nkabinde denied during the investigation that she ever

received this document or discussed the matter of apportionment of cost with
the President. While the document appears to have disappeared without
trace, virtually all members of the executive met or interviewed intermittently
alluded to some of its contents.

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6.72.11. Messrs Rindel and Khanyile stated that they never received a response to
this Internal Memorandum and that they do not know whether it was ever
presented to the President.

6.72.12. During the investigation, Mr Rindel and R&G Consultants stated that the

works that were identified as "private" in the said document, dated 1 1 March
201 1 , were not implemented, due to the fact that no response in this regard
was received from the Minister. It should be noted that the biggest portion of
the estimated costs identified as "private" related to landscaping.

6.72.13. The evidence obtained during the investigation further indicated that

members of the DPW professional services team specifically questioned the
cost apportionment in respect of landscaping and the swimming pool. The
view was expressed that the scope of landscaping went wider than was
necessary and that the difference in the cost between the construction of a
swimming pool and that of an ordinary water reservoir should be paid by the
President.

PART E: EVIDENCE ON THE INVOLVEMENT OF THE INDUSTRIAL
DEVELOPMENT CORPORATION AND ALLEGATIONS OF IMPROPER
BENEFITS AFFORDED TO THE PRESIDENT'S BROTHERS

6.73. The Granting of Financial Assistance by the Industrial Development
Corporation to Bonelena

6.73.1. As indicated above, Bonelena Construction Enterprise and Projects CC
(Bonelena) was awarded construction contracts by the DPW for the Nkandla
project in the amount of R98 292 299. It submitted its first proposal for the

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6.73.2.

6.73.3.

6.73.3.1
6.73.3.2

6.73.4.
6.73.5.

project in terms of a nominated procurement procedure to the Regional
Office of the DPW, on 23 March 2010.

The contract for the emergency works was awarded to it by the Regional
Manager on 15 June 2010, in the amount of R19 174 478.52. A further
contract was awarded to Bonelena for Phase 2 of the Nkandla Project. At the
conclusion of the investigation it had been paid a total of R78 167 742 of the
contracted amount.

The selection criteria applied in the case of Bonelena was whether the
contractor:

Had passed the "required NIA clearance" and

Was registered "at the minimum CIDB grading, being 7GB, 7CE OR 6 GBPE,
6 CEPE or higher."

The Internal Memorandum submitted by Mr Rindel to the RBAC,
recommending that Bonelena be approved as one of the nominated
contractors stated that it passed the NIA clearance and that it had a CIBD
grading of 7GBPE.

The grading process applied by the Construction Industry Development
Board (CIDB) is prescribed by the Construction Industry Development
Regulations, made in terms of the Construction Industry Development Board
Act, 2000. It includes detailed scrutiny of the contractor's financial viability
and ability to successfully complete construction projects within specified
ranges.

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6.73.6. It was confirmed from the database of the CIDB during the investigation that
Bonelena was registered from 16 February 2009 and had a grading of 7GB
PE. The grading of 7GB PE qualified Bonalena, also in terms of the DPW
SCM Policy, to undertake general building construction projects up to a value
of R100 million.

6.73.7. During the investigation, it transpired that Bonelena applied to the Industrial
Development Corporation (IDC) for financial assistance in the amount of R5
million on 28 May 2010, i.e. after it had submitted an offer to the DPW for the
first phase of the Nkandla project.

6.73.8. Ms Nena, the sole member of Bonelena at the time, explained in her

6.73.9. According to Ms Nena, Bonelena applied for financial assistance before it
was even aware that the contract in respect of Phase 1 of the Nkandla
project would be awarded to it.

6.73.10. The IDC required comprehensive documents from Bonelena in order to
consider its application, including the:

6.73.10.1 Business profile;

6.73.10.2 Financial statements;

6.73.10.3 Bank statements;

evidence that Bonelena was experiencing cash flow problems at the time
when the contract in respect of the Nkandla Project was awarded to it, due to
its involvement in other projects. Bonelena was growing and required
funding. This was the reason why it decided to approach the IDC.

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6.73.10.4 Tax Clearance Certificate;

6.73.10.5 Contracts with the DPW and the relevant scope of works in respect thereof;
and

6.73.1 0.6 Personal profile and resume of the sole member of the entity, Ms T M Nene.
6.73.11. It appeared from the documents obtained from the IDC during the

investigation that the application took quite some time to be considered and
that further supporting documents were requested during the evaluation
process.

6.73.12. The contracts that were awarded to Bonelena by the DPW in respect of the
Nkandla Project were included to support its application.

6.73.13. The information and documents provided by the IDC also indicated that
Bonelena's application was put through its internal processes and detailed
financial and other diligence tests and investigations.

6.73.14. The General Counsel & Divisional Executive: Legal & Post Investment
Monitoring of the IDC explained during the investigation that:

"At the conclusion of its investigations set out above, the IDC's findings,
summarized below, were inter alia that the business demonstrated economic
merit and commercial viability, particularly in that amongst others the
Applicant:

• was 100% black female owned and managed business (sic) which
started its operations from home 5 years prior and thus fitted within the

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IDC's mandate and strategy to develop and support emerging black

owned businesses within the industry and the province;

has thus far already managed to grow its Construction Industry

Development Board (CIDB) grading from 1 to 7 GB PE;

operated primarily in the KwaZulu-Natal Province and had already

completed a number of contracts for the provincial government

departments over the years and built a good reputation for itself which is

evidenced by an Award of Excellence it received from Dr Ina Cronje

(erstwhile MEC for Education in the province) for outperforming all

emerging contractors;

had grown its business into a sizeable operation handling projects for
the South African Government inter alia schools; community halls;
cultural centres; police stations; hospitals and as at the date of
application it handled projects valued at circa R200 million within the
province;

had applied for and was awaiting the outcome of tenders for contracts
worth R50 million;

had recently been awarded contracts for a school construction project in
Waterloo Verulam for R23 million and phase2 of Project A security
measures for R61 million (the Nkandla project.);
had forecasted income statements and balance sheet indicating that it
would be able to service the IDC loan in accordance with the agreed
terms and conditions. . ."

6.73.15. On 7 February 2011 (almost 10 months after it was submitted), the IDC

approved Bonelena's application for funding amounting, to R40 295 000.

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6.73.16.
6.73.17.

6.73.18.

6.74.
6.74.1.

6.74.2.
6.74.3.

The records of the IDC further indicate that one year and 5 months later, on
1 8 July 201 2, Bonelena was placed under final liquidation at the insistence of
one of its unpaid suppliers.

On 25 February 2013, the KwaZulu-Natal High Court sanctioned the offer of
compromise proposed between Bonelena and its creditors and accepted by
them at a meeting held on 15 February 2013, in terms of section 155(7)(b) of
the Companies Act, 2008, read with section 66(1 A) of the Close Corporations
Act, 1984. Bonelena was discharged from liquidation and the final winding-up
order issued by the Court on 1 8 July 201 2 was set aside.

According to the IDC, its exposure due to the liquidation (by March 2013)
amounted to R19,7 million. At the time of the conclusion of the investigation,
the offer of compromise was still in the process of being implemented.

The Cancellation of Bonelena's Contract

The records of the DPW indicate that Bonelena was informed in writing on 15
March 2012 that it failed to comply with the relevant Principal Building
Agreement in respect of Phase 2 of the Nkandla project and that further
failure would result in cancellation of the contract.

On 10 April 2012, Mr Khanyile informed Bonelena that its contract was
cancelled.

Several of the DPW officials and consultants interviewed during the
investigation confirmed that Bonelena was underperforming during Phase 2
of the Nkandla project and caused substantial delays. It was also indicated
that Bonelena appeared to have had serious financial problems at the time.
Some of the witnesses expressed the view that the company had the

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capacity to perform the works in terms of the contract, but that the business
was badly managed.

6.74.4. However, according to Bonalena's Ms Nene, she had no idea why the

contract was cancelled. She complained that her business experienced
several frustrations during the implementation of the Nkandla project,
including payment delays. She is of the view that negative publicity relating to
the Nkandla project, the payment and other delays were the main causes
that the business was liquidated.

6.74.5. A contract for the outstanding works estimated at a cost of R5 million at the
time, was subsequently awarded to Moneymine by means of an approved
negotiated procurement process.

6.75. The Allegation that the President's Brothers Benefitted from the
Nkandla Project

6.75.1. On 2 December 2012, the Sunday Times published an article under the

heading "OH, BROTHER" stating that public funds allocated for the Nkandla
Project had been used to pay for renovations to the homes of two of his
brothers.

"In documents seen by the Sunday Times, Michael and Joseph Zuma are
listed as having had supplies by electrical company Voltex delivered to their
homes as part of the 'prestige project'-as the Department of Public Works
has dubbed the Nkandla upgrade.

6.75.2. According to the article:

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Invoices for the work by the Durban-based company were submitted to a
building contractor involved in the Nkandla project and have been laid bare in
papers before the High Court in Durban.

Voltex went to court to recoup R545 249 it says was owed by contractor
Pamela Mfeka. She was awarded a reported R47.6 million contract by the
Department of Public Works to construct six buildings in Nkandla.

According to the court papers, Mfeka, 46, defaulted on the payments for
electrical cables and other goods supplied for Zuma's luxury compound and
his brothers' modest homestead in Nxamalala village.

Michael denied that any work had been done to his or his brother's home.

The court papers contain numerous invoices, dated between November 3
2011 and November 3 2012 in which Voltex billed Mfeka's company,
Moneymine Enterprises, for electrical products bought for Michael's and
Joseph's homes as well as the upgrade of Zuma's homestead.

Several of the invoices refer to the prestige project, while some list the name
of the village, Nxamalala, where all three homesteads are situated.

One of the bills dated November 30 201 1, showed an amount of R 3915 for
electrical goods for Michael's home.

The matter was scheduled to be heard of Friday, but a settlement agreement
was reached early in the day between the parties' lawyers."

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6.75.3. In its response to the allegations which were raised with Voltex during the

investigation, Voltex expressed its outrage at what it regarded as inaccurate
reporting by the Sunday Times. The Legal General Manager of the company
stated in his response to my enquiries, dated 26 March 2013, that:

" The Voltex Group is a wholly owned subsidiary of one of the most prominent
industrial companies in the Republic of South Africa and it is common cause
that Voltex' relationship with Moneymine 310 CC trading as Moneymine
Enterprises ("Moneymine") is simply that of a supplier/customer relationship.

Voltex' involvement in this matter was purely as a supplier of electrical
products, in the ordinary course of its business, to a customer who had been
trading with it since 2008 being Moneymine). On or about October 2012,
Voltex proceeded to institute legal action against Moneymine for the recovery
of amounts which were due and owing to it for goods sold and delivered to
Moneymine in the ordinary course of its business. "

6.75.4. The relevant court papers obtained during the investigation confirmed that

Voltex instituted legal action against Moneymine in the KwaZulu-Natal High
Court on 6 August 2012. The basis for the action was Voltex' claim that
Moneymine owed it R545 294.12 in respect of goods purchased.

6.75.5. Attached to the Particulars of Claim were several supporting documents,
including statements reflecting goods purchased from Voltex by Moneymine.

6.75.6. It was noted that the items in the Moneymine statements included references
to "nxamalala", "dbn prestige", "Nkandla" "Dundee court", "vuleka" ,"highflats"
and a number of others.

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6.75.7. Next to the date "30/11/2011" appeared the reference "Mike Zuma" and the
amount reflected is R3915.33.

6.75.8. The statements also contained a reference to "Joseph" dated 19 March 2012
for an amount of R2249.22 and "Joseph Zuma" dated the same day for an
amount of R1 14.00.

6.75.9. When approached, Voltex explained that the goods supplied under these
three references were general electrical items such as cabling, switches and
sockets which are ordinarily used in domestic installations.

6.75.10. As far as the items related to "joseph" and "joseph zuma" were concerned,
Voltex were requested to deliver it to: 9A Hangerberger Road Newlands
East. The request was marked: "ATT MELVIN".

6.75.1 1 . The items in respect of "mike zuma" were delivered, at Moneymine's request,
to: 19 Russell Steet, Pinetown.

6.75.12. Mr and Ms Mfeka of Moneymine explained when interviewed, that

Moneymine was involved in a number of projects at the same time when it
was involved in the Nkandla project. As a long standing and well known
construction company, Moneymine has a number of clients to whom it
supplies building materials and for whom it does work from time to time and
that Voltex one of its regular suppliers.

6.75.1 3. They explained that Moneymine was building houses for Mr Mike Zuma in his
private capacity and confirmed that Messrs Mike and Joseph Zuma are
related to the President.

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6.75.14. They advised that Moneymine ordered certain items from Voltex for the

private development relating to Mr Mike Zuma. It was ordered separately
from items ordered for the Nkandla Project and therefore invoiced and
recorded accordingly on the statement documents.

6.75.15. As far as Mr Joseph Zuma is concerned, Moneymine was involved in a small
project that related to the installation of electricity at his house.

6.75.16. They further explained that the items ordered in respect of Mr J Zuma were

delivered to Melvin, Moneymine's electrician, at his address in Newlands.
The submitted that orders placed in respect of Messrs Mike and J Zuma had
nothing to do with the DPW project and were paid for separately as was the
case of other clients of Moneymine reflected on the Voltex statements. No
claim was ever submitted to the DPW for the items reflected in the said
statements.

6.75.17. The dispute between Voltex and Moneymine has been resolved and the
outstanding amounts paid.

PART F: THE INTERNAL TASK TEAM REPORT
6.76. The Investigation of the Internal Task Team

6.76.1. The Minister of Public Works, in conjunction with the Ministers of State

Security and Police, appointed a Task Team of officials, from the
Departments responsible for the Nkandla Project, to investigate allegations of
impropriety relating to its implementation, around November 2012.

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6.76.2. The findings of the Task Team Report were announced by the Minister of
Public Works in a media statement, issued on 27 January 2013 and the
report was finally declassified and made public on 1 9 December 201 3.

6.76.3. It is important to note that by then the Presidency and Security Cluster were
well aware of my investigation, with some having already responded to the
standard document and information request from my office.

6.76.4. As part of my investigation, I requested on several occasions to be provided

with a copy of the Task Team Report and was only eventually granted limited
access by the Minister of Public Works on 2 July 2013. The report was
classified by him as a "Top Secret" document. I was only allowed to peek into
the document without copying it or keeping it beyond a few hours.

6.76.5. It was reported in the media that the Democratic Alliance brought an
application in the High Court for access to the Task Team Report, in terms of
the provisions of the Promotion of Access to Information Act, 2000.

6.76.6. After the report was declassified for no apparent reason, as the

circumstances under which it was regarded as classified did not change from
January 2013 to December 2013, the Special Advisor to the Minister of
Public Works reportedly filed an affidavit in the court application stating that
there was no difference between the report that was classified and the report
that was released in December 2013.

6.76.7. Media reports on 18 February 2014 indicate that the Minister of Public Works

agreed to pay the wasted legal costs of the Democratic Alliance. More public
funds were therefore spent to protect information that clearly did not qualify to
have been classified in terms of the MISS.

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6.76.8. The report is now freely available to the public and I therefore do not intend

to refer to all of its contents here. Suffice to say that the Task Team's terms
of reference were much narrower than what was covered by my
investigation.

6.76.9. However, I have noted the following statements made in the Explanatory
Note to the report, which are of particular relevance:

The DPW as the implementing agent in respect of the security requirements
of the DOD and SAPS was supposed to have ensured that the funding
required was available and budgeted for, the source of the funding identified
and the procurement prescripts and requirements complied with.

"The major challenge identified by the Task Team was that there was no
coordination between various departments that ought to have been involved
in the security upgrades in order to determine the appropriate budget for the
project and the costing. For instance, DPW estimated the project at R27
million before assessments were conducted by SAPS and SANDF.
Notwithstanding the fact that DPW had managed projects of a similar nature
in the past, poor management of the project led to the incorrect estimation of
the project."

"The assessment of the SANDF indicated a lack of the required level of
medical facility in the immediate vicinity as prescribed in the Standard
Operating Procedures (SOP). The 140 000 population of Nkandla
Municipality shares among itself the services of ten primary health care
facilities (inclusive of mobile clinics) and two tertiary-level services (Nkandla
and Khombe hospitals) for health care. Nkandla Hospital has six permanent
doctors and four seasonal medical practitioners". To augment the services
are private doctors and traditional healers. The facilities are too far away and

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unable to meet the standards or the nature of health care required for the
President and his household. At the time the nearest facility with the required
standard was two hours away in Durban."

6.76.10. The explanation provided in regard to the Visitors' Centre is that due to the
large number of people that visit the President at his private residence there
was a security challenge to control them.

6.76.11. The Task Team made a preliminary finding that there is a possibility of
inflated prices and overcharging.

6.76.12. I have also taken cognizance of the following findings of the Task Team
Report :

6.76.12.1 The Nkandla project was not included in the DPW Medium Term Expenditure
Framework for the financial periods 201 0-201 3;

6.76.12.2 The DPW did not pay any contractor for the construction of the private

dwellings of the President. I noted that this aspect did not form part of the
Task Team's terms of reference. There is also no indication in the report
whether and how this was investigated;

6.76.12.3 The report further stated that "it was also found that the then Minister of

Public Works, Minister Doidge and Deputy Minister Bogopane-Zulu attended
and presided over site meetings and in some instances interacted with
contractors involved in the project. This was reflected in the minutes, memos
generated by officials of the DPW and from evidence of the three officials and
one contractor who raised uneasiness with the involvement of the executive
in the project. "

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6.76.12.4 Despite the fact that the object of Nkandla Project was to secure the
President and that most information relating thereto was classified as "Top
Secret" the following service providers that were intimately involved in its
implementation had no security clearance:

SERVICE

Minenhle Makhanya Architects

Principal Agent and Architect

C A Du Toit

Security Equipment

IbonghoConsultants

Civil Engineeri

llangalethu Consulting

Quantity Surveyor

Mustapha and Cachalia

Mechanical Engineer

IGODA

Electrical Engineer

E Magubane Information Systems*

Electronic Detection Systems

Figure 13: Consultants Appointed without Security Clearance

* This service provider who was contracted for the installation of intruder detection systems was
denied security clearance in 2008 and was not subsequently issued with any such clearance for
the Nkandla Project

6.76.13. The findings of the Task Team Report in respect of the procurement
processes followed and the payments made to service providers are mostly
in line with the findings contained in this report, albeit less detailed and not
fully supported by evidence. It should also be noted that the investigation of
the Task Team was initiated by Ministers responsible for Department s who
were involved with the implementation of the Nkandla Project, as opposed to
my investigation as an independent Constitutional institution.

6.76.14. The report of the Task Team was noted to have made the following
recommendations:

6.76.14.1 Parliament to review the National Key Points Act;

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6.76.14.2 A departmental policy to be developed for Prestige Projects;

6.76.14.3 A cost apportionment to be done to determine which cost should be allocated
to which stake holder;

6.76.14.4 The justification for the delegation of authority to the RBAC to procure goods
and services above R20 million in respect of the security project has to be
investigated;

6.76.14.5 The "surety" made by the DPW to the IDC on behalf of Bonelena to be
investigated further;

6.76.14.6 Irregularities identified be further investigated and any professionals who
might be found to have acted unethically be reported to the relevant
professional bodies and/or institutions;

6.76.14.7 Immediate disciplinary measures be instituted against any government
officials who might be implicated in any kind of wrongdoing, including the
flouting of policies and procurement procedures

6.76.14.8 The SSA to conduct a comprehensive information security risk assessment
of the project;

6.76.14.9 The role of the former Minister and Deputy Minister of Public Works in the
project to be clarified and investigated.

6.76.1 4.1 All DPW Supply Chain Management personnel to be security vetted;

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6.76.14.1 1 The Ministerial Handbook to be reviewed to bring it in line with the National
Key Points Act and the Cabinet Policy regulating security measures at the
private residence of the President; and

6.76.1 4.1 2 Any breach of the law to be reported to the appropriate authorities.

PART G: THE RESPONSES SUBMITTED BY THE PRESIDENT IN REPLY
TO QUESTIONS PUT TO HIM DURING THE INVESTIGATION

6.77. On 29 January 2013, I wrote to the President to inform him of my
investigation of the complaints referred to in paragraph 2 above. I specifically
stated the details of the complaint lodged by Prof De Vos in connection with
the statement that the President allegedly made to the National Assembly on
15 November 2012 that the development of the first phase of his private
residence was financed by a commercial bank that secured a mortgage bond
in respect of the property.

6.78. My letter also stated that:

"You will be afforded an opportunity to respond in full to the allegations, once
I am in a position to provide you with more detailed information regarding the
matters concerned.

It would be of assistance to me to consider the merits of the complaint lodged
by Prof De Vos, if you could request the Presidency to provide me with a
copy of the registered bond relating to your private residence and any other
relevant documentation and/or information pertaining to the funding thereof.
Such documentation and information will, due to the nature thereof, be kept
secure and handled with the appropriate discretion and confidence. "

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PUMJG PCOIEOOI?
SOUTH flfPICfl

6.79. I received no response from the Presidency in respect of my request for
information, despite having approached it again in this regard on 1 1 April
2013, 21 June 2013 and 19 August 2013. I also wrote to the President
directly in this regard again on 29 July 2013, but received no response.

6.80. Eventually, I personally met with the President in connection with my
investigation on 11 August 2013, a day before my inspection of the works
implemented by the DPW at his private residence at Nkandla. I have made
reference to my discussions with the President on certain aspects of the
Nkandla Project under different headings in this report.

6.81. During our meeting, I also provided the President with a set of written
questions that related to my investigation and in respect of which I required
his response. The President undertook to provide me with a written
response.

6.82. As no response to my questions was forthcoming, I approached Dr Lubisi,
the Director-General in the Presidency, again requesting his assistance in
this regard, on 26 August 2013.

6.83. A copy of my written questions with annexures had to be provided to the
Presidency, at its request, on 27 August 2013.

6.84. Eventually, I had to write to the President directly on 16 September 2013 to
again request his response to my set of questions.

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PUfctK PROIEOOI?
SOUTH flfPICfl

6.85. My questions were as follows:

1. "Did you or the Presidency request that security measures be installed
at your private residence at Nkandla after you were appointed as the
President in May 2009, as provided for in the Cabinet Policy on Security
Measures at the Private Residences of the President, Deputy President
and former Presidents and Deputy Presidents, dated 20 August 2003?
If so, kindly indicate who made the request, when and how.

2. Were the measures that the Department of Public Works intended to
implement at your private residence communicated to you by the
Minister of Police, as contemplated by the Cabinet Policy? If so, what
were your impressions of the proposed measures and did you formally
consent thereto?

3. Where you at any stage informed of the cost of the proposed security
measures? If so, who presented the cost to you, what was the amount,
and how did you respond to it?

4. Your private residence was declared a National Key Point by the
Minister of Police, in terms of the National Key Points Act, on 8 April
2010. According to the evidence obtained during the investigation you
were notified accordingly by means of a notice (Annexure A) signed by
the Minister of Police. Can you kindly confirm that this notice was
served on you?

5. What was you understanding of the declaration of your private
residence as a National Key Point in terms as your responsibilities as
the owner?

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10.

Did you at any stage respond in terms of the notice by taking measures
to secure your private residence, as required by the National Key Points
Act and the notice? If so, what measures were taken?

From the evidence it appears that the Minister of Police acted on your
behalf, as contemplated by section 3A of the National Key Points Act,
when he had your private residence secured. Were you notified of this,
as is required by the Act and if so how?

Were you ever advised by the Minister of Police that any part of the cost
of securing your private residence as a National Key Point would be
recovered from you? If so, when and how?

According to the evidence, you met with representatives of the
Department of Public Works and the South African Police Service at
you private residence on 12 August 2009, where you were briefed on
the security measures that were to be installed in the three new
dwellings that you were constructing. Is this correct, and if so can you
kindly explained what transpired at this meeting.

The evidence obtained during the investigation also indicates that you
complained on several occasions about the slow progress made with
the implementation of the security project. Is this correct, and if so can
you kindly explain the reasons for your concerns and how it was
addressed?

According to the evidence, you requested the former Minister of Public
Works, Mr G Doidge, to look into the delay. Is that correct? If so, did he
report back to you and what were the nature of his reports?

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e>eo>te<toe?

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12. Mr M Makhanya, the architect that you appointed in respect of your
private construction on the premises, was also appointed by the
Department of Public Works as the Principal Agent for the security
project. Did he present you with the designs of the Department of Public
Works' security project? If so, can you recall which designs were
presented to you and how you responded to it?

13. According to the documentation obtained during the investigation,
former Minister of Public Works, Ms G Mahlangu-Nkabinde, informed
you in writing of the progress made with the implementation of the
security project, shortly after she was appointed, on 5 November 2010.
(Annexure B) Can you kindly look at the copy of this letter and indicate
whether you received it and how you responded to it.

14. Former Deputy Minister of Public Works, Ms H Bogopane-Zulu
indicated during the investigation that she discussed the security
measures with you. She also raised the possible apportionment of costs
of the security measures between you and the state with you and
requested a document to be prepared by the project team in this regard.
The document was prepared and delivered to the Ministry of Public
Works. (Annexure C) Can you please look at this document and
indicate whether it was presented to you, and if so what your response
was?

15. If the document was not presented to you, was the apportionment of
costs ever discussed with you? If so when and by whom?

16. Did you ever enquire into it, and if so what was the response that you
received?

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17. Deputy Minister Bogopane-Zulu also indicated that she discussed the
conversion of the fire-pool on the premises into a swimming pool with
you and that you supported the idea that it could be used to teach
children of the village to swim. Is this correct?

18. Kindly indicate whether you are aware of the reasons why the fire -pool
was converted into a swimming pool and whether the additional and
apportionment of such costs were discussed with you. If so, who
discussed it with you, and what was your response?

19. The implementation of the security project resulted in the relocation of
four households that were living on the site. Were you consulted in
connection with the relocation and, if so, what was your response? Did
you issue any instructions in this regard?

20. According to the evidence, you apparently indicated that you were
opposed to more contractors working on the site when Phase 2 of the
project commenced, that is the construction of staff housing, etc. Is this
correct and if so why were you opposed to more contractors? Did you
issue any instructions in this regard?

21. Deputy Minister Bogopane-Zulu further indicated during the
investigation that you supported her idea that the military clinic should
be designed in such a way that it could also be used by members of the
community. What is your response to that?

22. It was also indicated during the investigation that you raised concerns
about the bullet resistant glass that was installed in your houses. Is this
correct and if so, can you kindly explain ?

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23. A newspaper report alleged that two of your brothers, Messrs Joseph
and Mike Zuma improperly benefitted from the security project when
items that were destined for it were delivered at their houses. What is
you comment on this allegation?

24. As indicated in my letter addressed to you on 29 January 2013
(Annexure D), I have also received a complaint in connection with a
statement that you made to Parliament about the bond on the property
concerned. I have repeatedly requested to be provided with the relevant
documents to enable me to deal with this complaint. Are you now in a
position to provide these documents?

25. Would you be willing to disclose the amount that you paid for the
construction of the three new dwellings?

26. How often do you use your private residence at Nkandla for official
purposes?

27. Is there any particular reason why you would prefer to use your private
residence for official business rather than any one of the official
residences that are available to you?

28. Did you at any stage enquire into the cost of the security project, which
was obviously extensive? If not, did you not feel obliged to do so as the
head of state and as a substantial amount of public money was
obviously being spent?

29. How would you describe your involvement in the security project that
was implemented by the Department of Public Works at your private
residence?"

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6.86. The President provided me with a response under a covering letter from the
Acting Secretary of the Cabinet, dated 1 October 2013. His response was in
the form of a statement, signed by him on 30 September 2013.

6.87. In the opening paragraphs of his statement, the President denied that he was
ever apprised of the fact that his conduct formed part of my investigation.

6.88. He proceeded by explaining the location of his family homestead at Nkandla
and the history of his occupation of the property. Of particular significance to
the subject of my investigation, is the following extract of the President's
statement:

"As the political environment stabilized in the coming years with the advent of
our new democracy, I now felt more confident to effect improvements to the
family homestead in order that it could cater for our needs more adequately.

I proceeded to engage a building contractor to effect the improvements to my
homestead. Several new rondavels, each self-contained, were constructed.

These improvements were financed by a home loan obtained from one of the
four largest commercial banking institutions in the Republic upon satisfaction
of their collateral requirements. The property is still subject to a mortgage and
I continue to meet my financial commitments in terms thereof.

In the ensuing years and as I began to play a leading role in government, I
had to submit to the security protocols which senior government officials are

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subjected to. Static security was provided from the South African Police
Services (SAPS), (sic) Ulundi, while protection services were provided from
SAPS Eshowe.

This meant that additional rondavels were constructed on my homestead in
order to cater for the accommodation of those police officials assigned for my
protection, given the lack of infrastructure in Nkandla. In addition, a car port
and storerooms were also constructed.

In 1999 I was appointed as the Deputy President of the Republic. As a
consequence of my increased responsibilities in government I received a
higher volume of frequent guests at my home in Nkandla. This, coupled with
the fact that my family had grown over the years, my family and I decided to
embark on fairly extensive and modern improvements to the property.

To this end we engaged contractors and commissioned the building of three
new houses which would be developed in phases over additional
neighbouring land which we acquired with the consent of the local chief.

The construction of the houses commenced under the direction of Minenhle
Makhanya Architects.

In 2009 I was appointed as President of the Republic. Immediately upon my
inauguration, members of the security cluster informed me regarding the

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results of the security assessment which attached to the office that I now
hold, including my residence at Nkandla.

As President of the Republic I have the benefit of residences at
Mahlambhandlophu in Pretoria, Genadendal in Cape Town and John Dube
House in Durban, all of which I make extensive use of. Equally, I maintain my
private residence at Nkandla.

Like most South Africans, I am particularly proud of my community and never
miss an opportunity to go home to Nkandla-the demands of my work
schedule permitting. I sometimes wish it otherwise, but I do not shed my
status as President when I am at home in Nkandla. People continually visit
me, seek my advice, support and counsel on a whole range of matters.
Similarly, matters of government do not grind to a halt during these all too in-
frequent visits to my homestead.

In the course of the engagements with the security cluster, I initially met with
then Minister Doidge, senior SAPS officials and other government officials at
my homestead in a consultative process regarding improved security due to
my occupying the office of President of the Republic.

I thereafter facilitated a meeting between the same grouping of persons and
Minenhle Makhanya Architects, the consultant who was already engaged
with building work at my home so that there would be as little disruption as
possible to the work already commissioned.

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From time to time I received briefings both formally and informally from the
various Ministers engaged with the security enhancements although I was
not intimately involved with the finer details.

At these briefings I expressed concern with what appeared to be inordinately
lengthy delays which impacted on my family. Equally, I found some of the
security features like the bullets-proof (sic) windows an excessive
encroachment on my use and enjoyment of my property.

Regarding the rationale for the adoption of particular security features, I
deem it neither prudent nor proper for me to comment, particularly where the
Public Protector has had access to a range of Ministers and officials properly
tasked with this responsibility.

The security upgrades are to be distinguished from the construction of
buildings which provide infrastructural support for security personal (sic).

I take exception to the continued conflation of the security upgrades with the
construction of buildings for the benefit of security personnel. Whilst neither
were at my behest, the latter is directly attributable to the fact of my
residence being located in a rural area with all the attendant challenges.
Even people drawn from rural communities can play a role in the
development of our constitutional democracy.

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With regard to my address to parliament, I submit with respect, that insofar
as it is alleged that I have misled parliament on the existence of my bond
over the Nkandla Property, parliament is best placed to enquire into this
matter should it so desire.

Likewise, it is not proper for me to account for alleged conduct of members of
my family who are not dependents of mine. Transgressions of the law by
whomsoever should be reported to the appropriate authorities. "

6.89. As the President's statement did not provide answers to most of my written
questions listed above I replied to him on 8 October 2013, listing the
outstanding responses that were required and stated that:

7 regarded it as prudent to provide you with an opportunity to respond to
these matters as part of my investigation and it would be appreciated if you
could still consider doing so, to enable me to include your version of the
events in my report"

As far as your response in respect of my investigation into the complaint
relating to the statement that you reportedly made to Parliament pertaining to
the existence or not of a bond over your property is concerned, you will recall
that I raised this with you when I informed you of my investigation, in my
letter dated 29 January 2013.

I indicated in my said letter that the concern raised by the complainant is the
impression that you might have violated the provisions of the Executive
Ethics Code by misleading Parliament. I also referred you to the public
statement of the Presidency of 20 November 2012 that the information

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pertaining to your bond would be made available to "an authorized agency
or institution empowered by the law of the land". You will respectfully
agree with me that this includes the Public Protector.

In addition to the normal manner in which I approach investigations, I relied
on the commitment in the Presidency's statement when I approached you
with the request on this aspect of my investigation.

I accordingly wish to appeal to you to provide me with the relevant
documents pertaining to the bond that you referred to. The information
contained in these documents will be handled discreetly as it relates to your
private affairs. All that I really need to verify in this regard is that the bond
exists and that it relates to your private residence at Nkandla. Providing me
access to the documents in the presence of your legal advisors or the
Secretary to the Cabinet will also suffice in this regard. "

6.90. In his reply, dated 24 October 2013, the President indicated that he required
copies or excerpts of evidence, reports and documents that were referred to
in my questions, before he could respond. He further stated that:

"Regarding your request that I make available my personal bond documents
for your perusal, I attach hereto the relevant transcript extracted from
Hansard which bears out the following:

• The Zuma family has built their own home;

• The home has been there for a long time;

• / engaged the banks and am still paying a bond on the first phase of my
home;

• / am still paying a bond this day.

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Having regard to the content and context, it becomes abundantly clear that
such bond relates to the first phase of the development and well before I
assumed the office of President. As I understand, it does not relate to the
period of your investigation nor does it shed light on any aspect thereof.

Accordingly, I hold the view that the disclosure you seek would be
unnecessary. "

6.91. I again regarded it as necessary to respond to the President to clarify my
earlier requests. In my letter addressed to him on 29 October 2013, I
reiterated that the complaint that I received in respect of the bond does not
relate to the security measures that were installed and implemented at his
private residence, but to the statement that he made in the National
Assembly on 15 November 2012, the contents of which are contested. I
explained that:

"It was in order to clarify this issue that I requested you to provide me with
access to the bond documents. As matters stand at the moment, I am not in
any position to make a finding on the merit of this complaint and would
therefore urge you to reconsider my request in this regard."

6.92. The President was also referred to the fact that a number of my questions do
not refer to any evidence, reports or documents. In respect of questions that
did relate to documents, I provided him with copies of such, which were also
attached to my original questions and later resubmitted to his office. As far as
the references to "evidence" were concerned, which only related to three of
my questions, I indicated that it would be covered extensively in this
Provisional Report, a copy of which will be presented to him for his
comments. The President's reply is still awaited.

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6.93. The following excerpt of the Hansard that I was referred to by the President

in his letter of 24 October 2013 is of particular significance to the matters
considered during the investigation:

"When I became the President, all of us in the family agreed to extend our
home, as I was extending it. Then government came and said that it had to
install security features at my residence. By the time government came, the
contractors were on site that had been enlisted by the family and not by the
government or Public Works. Government had a plan regarding what it
wanted to do. Government wanted to improve the fence, etc. I told
government that I had my own plan-which was a comprehensive plan- to
extend my home. What then happened was that I allowed government to
meet with the contractors who were already on site because government,
from a security point of view, insisted that they needed to participate.

So, even the manner in which the question was asked-the question being:
have you instructed the Minister to tell the contractors to stop working-
suggests that the contractors were brought by Public Works. Public Works
found those contractors constructing my home.

They had to agree to what government wanted them to do at my home. The
government had specific things they wanted to do to my houses, not build
houses for me. A wrong impression has been created in the country, that the
government has built a home for me. That is not true"

6.94.

I never received a further response from the President to the questions
posed to him.

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7.1.

7.1.2.

7.1.3.

7.1.4.

7.1.5.

7.1.6.

EVALUATION OF THE EVIDENCE AND INFORMATION OBTAINED
DURING THE INVESTIGATION

PART A: SEQUENCE OF EVENTS

The Initial Steps Taken and the Recommendations of the SAPS and the
DOD in Respect of the Security Measures that Needed to be
Implemented

The evidence and information obtained during the investigation shows that
the security measures at the President's private residence were completely
inadequate at the time when he took office. It basically consisted of a
dilapidated palisade fence with a gate and a guard hut.

The Security Advisory Service of the SAPS and the DOD assessed the
security situation and presented the DPW with its requirements for the
measures that had to be taken, during May and early August 2009,
respectively.

When the Director of the DPW responsible for Prestige Accommodation
requested funding for the recommended security measures to be
implemented, the amount indicated was approximately R27 million.

At that stage, the DPW was of the view that the measures to be taken could
be afforded from savings on its Capital Works budget.

However, in August 2009, the private construction of the President's three
new dwellings on the premises commenced. Security measures also had to
be installed in the three new buildings and due to its location, the scale of the
area that had to be secured increased accordingly.

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7.1.7. Officials of the DPW involved in the Nkandla Project were told that the

President preferred that the contractors and consultants appointed by him for
his private construction should also be appointed for the Nkandla Project.
This clearly had an impact on the decisions that were taken in respect of the
appointment of service providers. I refer to this in more detail below.

7.1.8. The evidence also indicates that due to the direct involvement of the Acting

Director-General of the DPW, Mr Malebye, when the Nkandla Project
commenced and the later involvement of a Deputy Director-General, the
Deputy Minister and the Minister, the officials at the Regional Office that were
mainly responsible for the implementation of the project, were convinced that
it was driven from the Ministry and the DPW Head Office and that they had to
do as they were told.

7.1.9. After the professional consultants, such as Minenhle Makhanya Architects

and R&G Consultants (Quantity Surveyors) were appointed by the DPW for
the Nkandla Project, it transpired that the full scope of the security
requirements of the SAPS and the DOD was not properly taken into account
by the DPW when the cost estimate of R27 million was presented to the
PMBC.

7.1.10. When R&G Consultants prepared its first cost estimate for the Nkandla

project in September 2009, it amounted to almost double the original
estimation of R27 million, i.e. R47.3 million. At this stage the main focus of
the designs and cost estimations in respect of the Nkandla Project was
Phase 1, which consisted of what was referred to as the emergency
measures that had to be taken to secure the President and his family at his
private residence.

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7.1.11. The evidence of Mr Malebye, that he was under the impression that the

Nkandla Project would not cost more than R27 million is inconsistent with the
first cost estimate prepared by R&G Consultants, which was addressed to
him as the Acting Director General and accounting officer.

7.1 .12. Mr Khanyile's evidence indicated that from the time that the Nkandla Project

commenced, the procurement procedures followed were different from the
norm and failed to comply with the prescribed standards of proper demand
management and budgeting. The officials involved clearly thought that due to
the fact that the Nkandla Project related to the security of the President,
which was why it was regarded as urgent, and as it was driven from the DPW
Head Office and the Ministry of Public Works, the deviation from the norms
were justified and not to be questioned.

7.1 .13. The following statements by Mr Khanyile in his response to the evidence and
information obtained during the investigation, are of particular significance in
this regard:

"What was abnormal is that:

Head office was running the project directly interfering with the duties of the
project manager and Region (Durban Regional Office). DG being the
accounting officer was directly involved in operational issues of the project by
coming to site, met the professionals, the project manager and gave
instructions that were contrary to policies of the state.

The Minister being political head of the Department was supervising the
project every two weeks by,

• Chairing the project site meetings,

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• Give (sic) instructions to the consultants, contractors, and the project
manager,

• Visiting the suppliers in Johannesburg to discuss materials to be used
on windows, interfering with the supply chain process of the department
and the functioning of the project manager.

They took and approve (sic) the decisions that were contrary to the policies
of the state. They became the referee and the player; they took decisions,
gave instructions, approved them and went to project site to implement their
decisions, overruling the project manager and the Region.

It is clear even from (sic) a man on the street that the project manager and
the Region:

• Were overruled,

• Intimidated

• Hand tied,

• Undermined,

• Compelled.

There is no tail that can wag the head on such a high profile project of the
first citizen of the country. The decisions and the instructions of the
commander of war are not to be blamed on the soldiers. "

7 AAA. Mr Malebye even went so far as to allow a deviation from the internal
directive that all procurements above R20 million had to be approved by the
SNBAC and delegated unlimited and unconditional authority to the RBAC.

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7.1 .1 5. He also approved the appointment of consultants and contractors for millions

of rand by means of nominated and negotiated procurement strategies,
which do not cater for the ordinary processes of proper competition and
selection, on the basis that the Nkandla Project had to be fast tracked.

7.1.16. The cost estimates prepared by R&G Consultants gradually started to
escalate from February 2010, as items relating to the project, and specifically
Phase 2 thereof were added.

7.2.2. The DPW Regional Office clearly experienced challenges to manage the

implementation of the Nkandla Project, from its inception. By March 2010, the
SAPS started complaining about the slow progress, as did the President from
May 2010. By then, not much had been achieved and the project was already
a year old.

7.2.3. The failure of the DPW to pay proper attention to the Nkandla Project and

plan for its implementation was also evident from the fact that by June 2010
no funding had been allocated to it for the applicable financial year, resulting
in reallocation of the DPW Capital Works budget.

7.2.4. There was a substantial increase in the estimated cost of the Nkandla Project

by July 2010, to approximately R130 million after the report of the consultant
involved in the detailed security measures and the additional earth works that
had to be done, were added to the list. This should clearly have been taken
into consideration and planned for by the departments involved when the
Nkandla Project started more than a year earlier, in May 2009.

7.2.

The lack of planning and proper budgeting continued

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7.2.5. The scale of the Nkandla Project and its impact on the premises where it was

implemented grew to such an extent due to all the measures being added
and implemented, that by August 2010 the Project Team regarded it as
necessary to employ the services of a Landscape Architect to advise on
rehabilitation of the land.

7.2.6. At this stage, additional requirements were added by the client departments,

which resulted in an extended size of the safe haven, additional guard
houses and a stronger perimeter fence. The estimated cost of the Nkandla
Project increased to approximately R145 million.

7.2.7. The evidence shows that due to a combination of poor planning , budgetary

lapses and a lack of controls the scale and cost of the Nkandla appear to
have been without boundaries. As more requirements were raised, designs
were added, cost estimates prepared accordingly and funds within the DPW
budget reallocated. It is therefore not surprising that the Director:
Architectural Services raised his concern to the Deputy Director-General of
the DPW by the end of August 201 0, stating that:

"Given the very humble beginnings of this project, nothing short of a full
township establishment is now required..."

7.2.8. A former Minister of Public Works (Mr G Doidge) became personally involved

in the Nkandla project from September 2010. Shortly thereafter, a private
Project Manager was appointed to expedite the process, resulting in an
additional cost of approximately R 5 million.

7.2.9. From the evidence stated above it was clear that the appointment of the
private Project Manager was the result of the pressure from the Ministry of

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Public Works for the Nkandla Project to be completed and the fact that the
Regional Office was struggling to manage it, due to its scale. All of this could
have been avoided if the project was properly planned when it commenced
16 months before.

7.2.10. Further additions to the safe haven and landscaping, inter alia^ pushed the
estimated cost to more than R190 million by mid-September 2010.

7.2.11. The Minutes of Progress meetings and the evidence of Brigadier Adendorff

and other officials that were involved in the Nkandla Project show that the
SAPS Security Advisory Service did not play a significant role in the design of
the Nkandla Project. It submitted certain proposals, but the ultimate design
details were left in the hands of especially Mr Makhanya, irrespective of the
costs involved.

7.2.12. I could find no indication that the ever escalating cost and lack of planning of
the project were ever attended to as serious issues by the respective DPW,
SAPS and DOD accounting officers during the implementation of thereof.

7.2.13. The concerns that were raised in this regard by members of the DPW
Professional Team seem to have been ignored as no action was taken and
they were eventually side-lined, as referred to below.

7.2.14. One of them, Mr Crafford, expressed his amazement during the investigation

that the scale of the Nkandla Project was just allowed to grow as and when
Mr Makhanya submitted new designs and suggestions. To him, the Nkandla
Project was like "working with a moving target".

7.2.15. The following statement by one of the other DPW officials during the
investigation was also of particular significance in this regard:

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"Further, the project manager and regional manager was in a further
disadvantage, as the architect appointed (Mr Makhanya) was having direct
access to the President, taking instructions from him and incorporating this
into the design works. This turned out to be counterproductive in some
instances, as the architect then instructed the project manager as to what to
do!"

7.2.16. Although there was some understanding amongst most of the witnesses
interviewed that part of the expenditure relating to the Nkandla Project would
be recovered from the President, his prior consultation and approval of the
measures concerned do not appear to have been material or a prerequisite
as far as continuing with the implementation thereof was concerned.

7.3. The Exclusion of Professional Services of the DPW during the
Implementation of the Security Project

7.3.1. The evidence obtained during the investigation indicates that the staff
members of the Chief Directorate: Professional Services, who were involved
in the Nkandla Project from the beginning, started to feel excluded and
complained accordingly to Mr Rindel, from March 2011. This was confirmed
in writing by Ms Pasley, the Chief Quantity Surveyor of the DPW.

7.3.2. If Ms Pasley's request for a scale and cost containment had been heeded,
scope creep and the escalation of costs could have been arrested as early as
December 2010, when she wrote a memo indicating her concerns and
suggested action.

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7.3.3. In his evidence, Mr Rindel conceded that the professional team had been
side-lined towards the latter part of the project. However, according to him,
the reason for leaving them out was that the President had indicated that he
did not want so many people involved in the project. This is difficult to
understand given that these professionals had been included earlier.

7.3.4. Mr Rindel also stated that he received instructions from the DPW Head Office
in the beginning of March 201 1 that persons not directly responsible for the
Nkandla Project had to be removed from it.

7.4. How Much Did the Nkandla Project Cost the DPW?

7.4.1 . The evidence indicated that by the time that the investigation was concluded,
the total expenditure of the Nkandla Project for the DPW amounted to R
215 444 415.68. The estimated cost of Phase 3 of the project that has not
been implemented is R 31 186 887.36, which would bring the total estimated
cost of the project to R 246 631 303.00.

PART B: THE GOODS AND SERVICES PROCURED BY THE DPW

7.5. The Contracts Awarded by the DPW

7.5.1. It was established from the evidence and information obtained during the
investigation that the DPW awarded twelve contracts to contractors and
employed seven consultants for the implementation of the Nkandla project.

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7.6.

Buildings Constructed

7.6.1. Besides the helipads, safe haven, security fences and other security
installations more than two dozen new buildings were constructed by the
DPW in the implementation of the Nkandla project.

7.6.2. In addition, new buildings costing approximately R8 million were built for the
relocation of households.

7.7. General site works

7.7.1. According to the evidence, the implementation of the Nkandla project also
involved the installation of lighting, monitoring equipment, access control
facilities, bulk earth works and landscaping.

7.7.2. Mobile accommodation for the SAPS staff and mobile generators were also
required during implementation.

7.7.3. The general site works amounted to more than R67 million.

7.8.1. None of the parties have disputed the amount of money spent by DPW on

PART C: THE SUPPLY CHAIN MANAGEMENT PROCESS

7.8.

The Procurement of the Services of Consultants and Contractors

security and related upgrades to the President's private residence at
Nkandla, which by the time of concluding the investigation stood at about
R215 million. It was also not disputed that the prescribed open tender

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process was not utilized for the procurement of the goods and services
required at any stage of the implementation thereof.

7.8.2. It is also common cause that only nominated and negotiated procurement
strategies were utilised, and in some cases there were direct contractual
appointments of service providers.

7.8.3. The evidence of members of the RBAC also revealed that they regarded the
Committee merely as a rubber stamp of decisions that were taken at the
DPW Head Office and at Ministerial level.

7.8.4. The implementation of the Nkandla project to date consisted of two phases.

Phase 1 was referred to as "Emergency Works" and described as the
measures that had to be taken immediately after Mr Zuma was appointed as
the President, to secure his private residence. Phase 2 consisted of the
additional measures that had to be implemented to establish security,
medical and logistical support on a long term basis at the President's private
residence.

7.8.5. The evidence shows that the consultants Ibhongo Consulting, Igoda Projects,
R&G Consultants and Minenhle Makhanya Architects were direct
appointments by the DPW, and approved by Mr Malebye.

7.8.6. The main motivation for these direct appointments was that the consultants

had already been appointed by the President for the private works that he
planned on the site and that there was a need to integrate the scope of works
of the Nkandla Project with the private works. A closer look at the process
does though, does not support this as the legitimate basis for the
appointment.

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7.8.7. Mr Malebye explained during the investigation that he regarded the security

of the President, the indication that the cost of the project would be in the
region of R27 million (which to him was not exorbitant) as factors to consider.
He was of the view that it would have been impractical to introduce a "new"
team of consultants to implement the Nkandla Project. Again, given the
different tasks to be performed it is unclear why these had to do everything.
The question becomes more relevant given that no evidence was presented
indicating that these consultants had been undertaken similar work to the
DPW brief on Nkandla before.

7.8.8. Bonelena was appointed by the DPW for "emergency works" in Phase 1 of

the of the Nkandla Project by means of a nominated procurement strategy,
which was approved by the RBAC on 2 March 2010, i.e. almost 10 months
after Mr Zuma was appointed as the President and the Nkandla Project had
commenced.

7.8.9. The motivation for the nominated strategy was that the contractors who
qualified to be considered had been approved by NIA (SSA) to work on the
Nkandla Project and that they qualified in terms of the required CIDB grading.

7.8.10. As indicated earlier, we now know that most of these did not have security

clearance. The RBAC approved the recommendation by Mr Rindel that
Moneymine be appointed as a contractor for certain selected works during
Phase 1 of the implementation of the Nkandla Project, by means of a
negotiated procedure. The request was motivated on the basis that
Moneymine had been appointed by the President to construct private
dwellings on the site and that the scope of the selected works would intrude
on the private construction.

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7.8.11. Furthermore, it was stated that the selected works could not be done by

another contractor as all guarantees that Moneymine would provide would be
null and void. In addition, that Moneymine had been cleared by NIA for the
Nkandla Project and was trusted by the President.

7.8.12. It should be noted that the scope of selected works, as presented to the

RBAC, included new SAPS guard rooms, a new "hospital", helicopter landing
pads and parameter security fence, which clearly did not intrude on the
construction works performed by Moneymine in respect of the President's
private buildings.

7.8.13. When confronted with evidence on irregularities, Mr Rindel indicated, that the

DPW "top management" started to become more actively involved in the
Nkandla Project from May/June 2010. He said that other officials of the
Regional Office got the impression that the top management of the
department had a different expectation of the implementation of the project
and the following was the result of instructions given to them that they could
not question:

7.8.13.1 To remove the installation of the bullet resistant glass from the contracts
awarded to Moneymine and Bonelena and to enter into a direct contract with
BRG;

7.8.13.2 To change the original idea of constructing a safe haven inside the new
residences and place it where it is today;

7.8.13.3 To remove the installation of the high security fence from the contract
awarded to Bonelena and to enter into a direct contract with Beta Fence SA;

7.8.1 3.4 To upgrade the specification of the low security fence; and

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7.8.13.5 To procure park homes, an emergency generator and air-conditioning by
means of a direct contracts.

7.8.14. The evidence further shows that the appointment of the private Project
Manager was made shortly after former Minister Doidge became involved in
the project, due to the concerns about the delay raised with him by the
President. By that time, the project had already been running for one year
and four months.

7.8.15. The evidence also shows that Mr Doidge became personally involved in
discussions with the selected supplier, SA BRG Glass. According to Mr
Rindel's Internal Memorandum submitted to the RBAC in this regard, the
order for the bullet resistant glass in the amount of R3 035 694.60 was
issued on the instructions of "Top Management".

7.8.16. On 23 September 2010, Mr Khanyile approved a request from Mr Rindel to
utilize "the urgent/emergency delegation" to directly procure bullet resistant
glass for installation as part of the implementation of the Nkandla project.

7.8.17. It was noted that this request was also made shortly after former Minister
Doidge became involved in the Nkandla project. The request stated that the
emergency installation had to be implemented as per instructions given by
the Minister, the Director-General, the SAPS and the DOD.

7.8.18. The evidence further shows that it was decided in September 2010 to
procure park homes for officials of the DOD and the SAPS that had to be
accommodated on the site, as an interim measure until Phase 2 of the
Nkandla Project was completed. Park homes in the amount of R2 436 396.60

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were directly procured from the only supplier in KwaZulu- Natal, Natal Park
Homes (Pty) Ltd.

7.8.19. According to Mr Rindel's evidence and that of R&G Consultants, the extent of
the Nkandla Project was better defined by December 2010. The designs
were at an advanced stage and the costing had been done by the quantity
surveyors. Phase 1 of the Nkandla Project was underway and Phase 2 could
commence.

7.8.20. On 10 January 2011, the RBAC approved the appointment of Bonelena for
the construction of 25 new buildings and related works as part of Phase 2, by
means of a negotiated procurement process.

7.8.21 . The RBAC's decision was clearly directly influenced by what was regarded
as instructions from the Deputy Minister.

7.8.22. Similarly, the RBAC approved a negotiated procurement strategy for the
appointment of Moneymine for the construction of 6 new buildings as part of
Phase 2 of the Nkandla project, on 17 January 2011. The motivation
provided by the Mr Rindel and accepted by the RBAC was exactly the same
as in the case of the appointment of Bonelena, referred to above.

7.8.23. The installation of the bullet resistant glass resulted in a lack of ventilation in
the affected buildings, which caused serious discomfort to its occupants. In
an Internal Memorandum addressed to the RBAC on 3 March 2011, Mr
Rindel stated in this regard:

"The scope of works included in phase did not include the installation of the
air conditioning units, as this was originally planned to be part of phase II.

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Meetings were held with the previous Honourable Minister G Doidge and
later with the Honourable Deputy Minister Bogopane-Zulu and DDG: ICR on
a 2 monthly/weekly basis.

It was identified during November 2011 that the installation of the air
conditioning units had become critical, as the BRG windows had been
installed and the houses became operational. This resulted in a possibility
that the air circulation was not sufficient and the air-conditioners was (sic)
then required to improve the situation.

The meeting agreed that the Durban Regional office must issue an
instruction to a (sic) acceptable service provider within 24 hours to proceed
with the works. The delegation was granted by the Regional Manager and
the Project Manager actioned this by instructing the contractor to continue
with the works.

An order had also been issued to the contractor on 30 November 2010 to the
value ofR 1 528 904.16."

7.8.24. The deviation in this case was therefore the direct result of poor planning on
the part of the DPW that caused the discomfort.

7.8.25. From the evidence it was further established that the direct appointment of

Betafence Projects SA for the installation of the perimeter fence for the
Nkandla Project was due to the fact that it is the only supplier in the country
that specializes in the product, which is required by the SAPS.

7.8.26. I could find no indication in the documents that was obtained and accessed

during the investigation that the reasons why the RBAC approved a
nominated procurement procedure in respect of the installation of lifts in the
amount of R2 069 607.70 was approved.

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7.8.27. According to the evidence the Acting Director-General of DPW directed that

the procurement process in respect of electronic security systems should be
limited to a negotiated process with one service provider, due to security
reasons. Messrs E Magubane was appointed as the service provider for the
amount of R1 1 .2 million. It was not clear from the evidence who identified the
service provider. However, it did transpire during the investigation that the
service provider did not comply with NIA's (SSA's) security screening
standard. The contractor that installed some of the most sensitive security
equipment for the safeguarding of the President at a cost of more than R1 1
million did not comply with the prescribed vetting standards. It is not clear to
what extent the security of the President could be compromised as a result of
this.

7.9.1 . In the case of the Nkandla Project two variation orders exceeding 20% of the

contract amount were approved by the RBAC. In the first case, a variation
order of 52.7% was approved on 10 January 2011 and in the second case
the RBAC approved a variation order of 58.6% on 24 January 201 1 .

7.9.2. Both variation orders related to Phase 1 of the Nkandla Project and the high
percentages are indicative of the absence of proper planning on the part of
the DPW.

7.9.

Variation Orders

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PART D: SPECIFIC ISSUES CONSIDERED DURING THE
INVESTIGATION

7.1 0. The Budget for the Security Project

7.1 0.1 . It is not in dispute that the DPW paid for every aspect of the implementation
of the Nkandla Project despite the fact that the client departments were the
SAPS, DOD and the Presidency.

7.1 0.2. In his response in this regard to the evidence and information obtained during

the investigation, the former National Commissioner of the SAPS, Gen B
Cele, stated that in his view the only role of the SAPS was to identify the
operational requirements and that it was for the DPW to fund "any structural
additions and amendments to President Jacob Zuma's residence necessary
to opitmise the execution of the SAPS mandate. I submit that it is precisely
for this reason that the SAPS never funded the Nkandla Project. .."

7.10.3. However, Mr Malebye who was the Acting Director-General of the DPW
when the Nkandla project commenced does not agree. He stated that:

"It was always contemplated that the DOD and SAPS would contribute to the
expenditure to be incurred. That contribution would be determined once the
procurement strategy had been developed and budget and funds had to be
allocated to the project. The allocation of funds would therefore include and
require a prior agreement with the SAPS and DOD in respect of their
respective contributions to the project. "

7.10.4. He further explained that the DPW, as the department responsible for the
implementation of the Nkandla Project, would incur the costs initially and

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would recover the appropriate portions thereof from the DOD and the SAPS.
Brigadier Adendorff was also of the same understanding.

7.10.5. It is not disputed that the DPW to date has not recovered any amount spent
on the Nkandla Project from the other departments involved.

7.10.6. The current Director-General of the DPW conceded during the investigation
that there was no specific budget allocated for the Nkandla Project and that
the approach was to fund it from the savings made on other capital projects.

7.10.7. From the evidence and information obtained during the investigation, it was

established that the implementation of the Nkandla project spread over three
financial years. When it commenced in May 2009, the amount requested by
the Regional Office was in the region of R27 million. It was indeed approved
on the basis that it would be sourced from savings made from other projects.

7.10.8. Mr Malebye, who was the Acting Director-General of the DPW when the
Nkandla Project commenced until the end of March 2010 stated that he was
of the firm belief that the cost would not exceed R27 million. As indicated
above, the cost of the Nkandla Project by February 2010 was estimated to be
more than R80 million. He denied having been aware of this.

7.10.9. However, Mr Malebye could not explain how it was possible that he, as the

accounting officer of the DPW, was not informed by the officials responsible
for the implementation of the Nkandla Project when the estimated costs
rocketed from R27 million to more than R80 million, especially as systems to
do so were in place. He further contended that: "The client departments
would obviously also at this stage, have to be involved prior to final approval
and allocation of budget. "

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7.10.10. It was also established that the Nkandla Project was not budgeted for in the
next financial year, i.e. 2010/201 1 . When Mr Rindel requested funding for it in
the amount of R38.9 million, the (new) Acting Director-General, Mr Vukela,
directed that R40 million should be reallocated to it from the Inner City
Regeneration and Dolomite Risk Programmes of the DPW. A further R18
million was reallocated to the Nkandla Project from the Border Control
Operation Coordinating Committee Programme.

7.10.11. Although the evidence indicates that the 2011/2012 DPW budget allocated
an amount of R123 900 million to the Nkandla Project, it was again
insufficient and a further R9 million had to be sourced from other
programmes of the DPW.

7.10.12. The same happened in the 2012/2013 when reallocation of the budget from
other programmes of the DPW to the Nkandla project resulted in an allocated
amount of R39.7 million.

7.10.13. The Inner City Regeneration and Dolomite Risk programmes of the DPW,

which were specifically affected by the reallocation of substantial amounts of
the budget allocated to it to the Nkandla Project, are important as both relate
to service delivery and safety issues. It is not clear from the evidence that the
reallocation related to funds that could be regarded as "savings", as indicated
by the Acting Director-General and contemplated by the relevant provisions
of the PFMA referred to below.

7.11. The Construction of Buildings and Other Structures on Land that
Belongs to the Ingonyama Trust

7.11.1. It is not in dispute that at the time of the conclusion of the investigation
referred to in this Provisional Report, the DPW had no lease agreement with

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the Ingonyama Trust in terms of which it could legally occupy the land on
which it constructed buildings and other structures as part of the Nkandla
Project (i.e. excluding the land privately occupied by the President).

7.11.2. In terms of the provisions of the KwaZulu-Natal Ingonyama Trust Act, 1994,

the Kwazulu-Natal Ingonyama Trust Board required the written consent of the
relevant traditional authority or community before it could enter into a lease
agreement with the DPW.

7.1 1.3. According to the information obtained during the investigation, the Nxamalala

Traditional Council only resolved that it had no objection to the application of
the DPW to acquire rights to the land concerned. However, it was specifically
recorded that the DPW would not erect any structure on the land until such
time as an appropriate lease agreement had been concluded.

7.1 2. Measures Taken Under the Provisions of the National Key Points Act

7.12.1. As I have indicated above, the President's private residence was declared a
National Key Point by the Minister of Police on 8 April 2010.

7.12.2. In his response to the evidence and information obtained during the

investigation, the Minister of Police furnished me with a copy of an SAPS
Information Note that he approved on 8 April 2010. The purpose of the
Information Note is stated to recommend to the Minister of Police to approve
the declaration of the President's private residence at Nkandla "to the status
of a National Key Point".

7.1 2.3. It further states that the SAPS Division: Protection and Security Services had
conducted a physical security assessment at the President's private
residence (no date provided) and that "with the recent spade of security

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transgressions of private individuals at the residence occupied by the
President, maintenance and improvement of the security of the President as
well as security stability of the Country (sic), it is imperative to ensure that his
residence is upgraded to the level of a National Key Point."

7.1 2.4. Surprisingly though, the Information Note then states the following:

"In the absence of the National Key Point Committee, the Government
Security Regulator would like to recommend that the private residence of
the President of South Africa at 8 Epping Road, Forest Town be classified
as a National Key Point." (emphasis added)

7.12.5. The Information Note makes no recommendation in respect of the
President's private residence at Nkandla.

7.1 2.6. It was recommended by the then National Commissioner of the SAPS, Gen B
Cele on 6 April 2010.

7.1 2.7. Gen Cele indicated during the investigation that his signing of the Information
Note did not impose any obligation on him as the National Commissioner, to
assist the Minister of Police in the performance of his functions in terms of
the National Key Points Act.

7.1 2.8. I was not provided with a copy of the "physical security assessment" referred
to in the Information Note, despite having requested it several times.

7.1 2.9. The relevant Declaration Certificate issued by the Minister of Police on 8 April
2010 in respect of the President's private residence at Nkandla informed him
that he was obliged to take measures at his own cost and to the satisfaction

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of the Minister "to prevent or counter subversion, espionage and sabotage
and/or to apply emergency measures in a situation of emergency and
disaster. "

"it is trusted that you will implement your security obligations as defined in
Section 3(1) of the National Key Points Act, Act 102 of 1980, at your National
Key Point." (emphasis added)

7.12.10. No evidence was presented to me or could be found during the investigation

that the President complied with this obligation. All the security measures that
were subsequently installed and implemented at his private residence were
procured and paid for by the DPW.

7.12.1 1. The Declaration Certificate further informed the President that his "protecting
unit"\s the local "SAPS Station". It further stated that:

"The total safeguarding of a National Key Pont (NKP) comprises not only the
security measures which you as owner are obliged to implement in terms of
section 3(1) of the National Key Points Act, but also the effective protection of
the NKP which must be implemented by the protecting unit. It is therefore of
the utmost importance that either you, or a person appointed by you, liaise
with the protecting unit of this National Key Point and the Provincial NKP
Officer to activate a Joint Planning Committee (JPC) for this National Key
Point in order to draw up a joint plan to counter an incident." (emphases
added) I could find no indication during the investigation that the local Police
Station in the area where the President's residence is located was involved in
any security or protection measures, as contemplated by the Certificate .

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There is also no evidence that a Joint Planning Committee was ever
established.

7.12.12. That the Declaration Certificate expected of the President to pay for the
security measures that had to be installed at his private residence also
appears from the following statement:

"In terms of Section 24 D of the Income Tax Act, you can submit a claim for
tax deduction in respect of expenditure incurred on security measures
implemented at you National Key Points.

It is trusted that you will implement your security obligations as defined in
Section 3(1) of the National Key Points Act, 102 of 1980, at you National Key
Point."

7.1 2.1 3. I have noted from the copy of the Declaration Certificate that was provided to

me by the Minister of Police that it was received by Dr Lubisi, the Director-
General of the Presidency, on behalf of the President. For reasons unknown
to me, the acknowledgement of receipt was dated 7 April 2011. It was
established that Dr Lubisi was appointed as the Director-General on 1
November 2010.

7.1 2.1 4. In the absence of a denial by the President, it can be safely assumed that the
Declaration was forwarded to him between April 201 and April 201 1 .

7.1 2.1 5. If so it can also be safely assumed that he knew that the contents asked him

to pay. There is no evidence of him protesting nor of the Minister of Police
revoking the decision that the security upgrades be on the President's
account.

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7.12.16. I also could find no indication that the DPW Regional Office was informed

that the President's residence had been declared a National Key Point and of
the implications thereof. Mr Rindel indicated during the investigation that if
the officials of the Regional Office had been informed, they would probably
have recommended that the project be stopped as very little of the planned
works had been implemented at the time.

7.13. The security measures taken in terms of the Cabinet Policy: Security
Measures at the Private Residences of the President, Deputy President
and former Presidents and Deputy Presidents

7.13.1. During the investigation, the Minister of Public Works indicated that the
Nkandla Project was based on this Policy and the provisions of the National
Key Points Act.

7.13.2. The witnesses involved in the implementation of the Nkandla Project that

were interviewed during the investigation, had no knowledge of the
provisions of this Policy or that the Nkandla Project was based thereon. This
is apparent in the evidence of Lt Gen Ramlakan and Brig Adendorff among
others.

7.13.3. It is also clear from the interviews conducted and the documents perused

during the investigation that there was a general understanding and/or
acceptance among the officials that the security measures were installed at
the President's private residence by virtue of the provisions of the Ministerial
Handbook.

7.13.4. For example, the initial public statements made by the Minister of Public
Works, Mr T Nxesi, in connection with this matter, it was evident that he also

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held such view. In his public statement issued on 27 January 2013, the
Minister stated in this regard that:

"In May 2009 after the inauguration of President Zuma, the Department of
Public Works in line with its obligation to effect security measures at the
President's private residence which is regularly used by the President,
became involved in the Nkandla residence.

The responsibility of Public Works in this regard is contained in the Ministerial
Handbook and the Cabinet Decision of 20 August 2003 which is now known
as the Policy on Security Measures at Private Residences of the President,
Deputy President and former Presidents and Deputy Presidents." (emphasis
added)

7.1 3.5. As indicated below, the Ministerial Handbook does not apply to the President.

7.14. The Security Evaluations Conducted by the Security Advisory Service
of the SAPS and the Security Measures Installed

7.14.1. The table below represents a comparison between the security measures

recommended by the Security Advisory Service of the SAPS after its first visit
to the President's private residence (Mr Zuma had already taken office at the
time), the recommendations contained in the second security evaluation
report, which was conducted approximately 16 months later and the
measures that were actually installed by the DPW. The DPW list differs
significantly. Worth noting are the items that are on neither of the security
evaluation lists. This begs the question regarding their origin. It must be
further noted that the items in question are primarily the ones that were
constantly mentioned in conversation alluding to the owners account, or

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matters discussed between Mr Makhanya and the President or to be
discussed between the two, according to the minutes.

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RECOMMENDED IN 28 MAY 2009
SAPS EVALUATION

RECOMMENDED IN 25 SEPTEMBER
2010 SAPS EVALUATION

INSTALLATIONS IMPLEMENTED
BY THE DPW

COST OF INSTALLATION

Perimeter protection:

Brick and mortar wall on a height of
2,4 m fitted with six strand electric
fence and CCTV camera system

Perimeter protection:

"Green fence" around the entire
homestead with a minimum height
of 3m, supported with intrusion
detection and single/double welded
mesh fence with deterrent
capability. "Due to the size of the
property there is a need for a path
between the fences that will be used
for patrol purposes."

External High Security Fence

R 6,238,892.57

Internal High Security Fence

R 8,103,045.18

Patrol roads paving and walkways

R 12,826,158.04

rxclULdUUM Ul [lUUbcMUlUb

obstructing construction of
perimeter fence

R 7 Q91 R1 7 AA

Entrance gates:

Three gates. First gate next to guard
hut for access control

Entrance gates:

Main entrance to the premises to
consist of a sliding steel gate,
motorized and remote controlled.
Other gates for internal use.

Included in perimeter protection

Second gate for live stock

Third gate for emergencies

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H3Ta91 i" J i T i I 3l VI 1 1 :T3^H H3Ta91 1 : J I t' J I * i VI 1 1 T3^H

RECOMMENDED IN 28 MAY 2009
SAPS EVALUATION

RECOMMENDED IN 25 SEPTEMBER
2010 SAPS EVALUATION

INSTALLATIONS IMPLEMENTED
BY THE DPW

COST OF INSTALLATION

Security control room:

The unused guard hut at the
emergency entrance to be used for the
monitoring of all security systems.
Guard hut to be strengthened and
secured.

Security control room:

New security control room to be
constructed, highly secured with
bullet resistant glass, security door
and installation of all monitoring
systems.

Visitors Centre and Control Room

R 6,720,852.95

Illumination:

Security illumination to be installed
around the premises to illuminate all
dark areas.

Illumination:

Security illumination to be installed
around the residence to illuminate
all dark areas without illuminating
the residence itself. Illumination also
to be installed at the vehicle
entrance to assist CCTV camera
system

Street and area lighting

R 914,002.75

Glazing:

The glazing of the three main houses
and study room to be replaced with
bullet resistant glass. The rest of the
glazing on the premises to be replaced
with laminated glass

Glazing:

All ■ 1 | • • , 1 •

All the glazing in the sensitive areas
to be replaced with bullet resistant
glass. The rest of the glazing on the
premises to be replaced with high
impact laminated glass.

Security measures and air
conditioning at residences

R 5,038,036.33

External doors:

All the external doors of the three
main huts to be replaced with solid
wooden doors with security locks and
security gates

External doors:

All external doors within the
premises to be replaced with
wooden doors of good quality with
security locks and security gates.

Part of security measures referred
to above

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RECOMMENDED IN 28 MAY 2009
SAPS EVALUATION

RECOMMENDED IN 25 SEPTEMBER
2010 SAPS EVALUATION

INSTALLATIONS IMPLEMENTED
BY THE DPW

COST OF INSTALLATION

Burglar proofing:

All windows to be fitted with burglar
proofing secured into the walls.

Burglar proofing:

All windows to be fitted with burglar
proofing secured into the walls

Part of security measures referred
to above

Fire Fighting Equipment:

a special Tire aeiecnon ana
suppression system to be installed in
all the huts on the premises. At least
two water hydrant pipes to be
installed for emergency use

Fire Fighting Equipment:

A fire detection system linked to the
control room and proper fire-fighting
equipment approved in terms of the
National Fire Regulations to be
installed

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Intruder alarm system:

To be installed at the premises to
cover all sensitive areas within the
premises.

Intruder alarm system:

To be installed at the premises to
cover all sensitive areas within the
premises.

Security work consisting of:

Data network

R 1,786,890.00

Access control

R 220,449.50

Builders work

R 1 274 419 13

CCTV Camera System:

To be installed to cover all entry
points, the entire perimeter and
parking areas

CCTV Camera System:

To be installed to cover all entry
points, the entire perimeter and
parking areas. The system to be
linked to the control room and guard
hut

CCTV Camera system

R 3,389,690.02

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RECOMMENDED IN 28 MAY 2009
SAPS EVALUATION

RECOMMENDED IN 25 SEPTEMBER
2010 SAPS EVALUATION

INSTALLATIONS IMPLEMENTED
BY THE DPW

COST OF INSTALLATION

Safe haven:

All three main bedrooms of the
huts/houses to be protected by means
of a double brick and mortar wall,
reinforced roof, fire suppression
system, fire-fighting equipment, bullet
proof glass, doors with security locks
and panic buttons

Safe haven:

The high risk option proposed was a
secure room that cannot be
surveyed or reached from outside
the house. It was to consist of
enforced brick walls and ceiling,
bullet resistant windows and a bullet
resistant door

Safe haven (underground),
corridor link, walkway and
emergency exit

R 19,598,804.10

Police Barracks:

"The existing police barracks must be
upgraded to be suitable for human
occupation. Ablution facilities to be
used by the SAPS members performing
static guard duties must be also be
upgraded. "

Police Barracks:

14 Bachelor flats, 12 lock up garages,
14 carports and. 2 offices and 2
guard huts (This was not mentioned
in the SAPS Security Evaluation
Report, but was submitted by the
SAPS to the DPW as a separate
needs analysis on 15 October 2009.

20 Residential staff houses (40
units)

Laundry facility

R 17,466,309.67

Water supply:

A new borehole to be sunk to improve
the water supply to the premises.

Water supply:

A new borehole to be sunk to
improve the water supply to the
premises. Alternatively, a mini sewer
treatment plant to be built on site

Site reticulation ( fire water, storm
water and waste)

R 2,961,936.01

Booster pump station and steel
reservoir tank

R 571,278.25

Sewer treatment plant

R 1,030,673.68

Sewer Pump Station

R 807,782.16

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RECOMMENDED IN 28 MAY 2009
SAPS EVALUATION

RECOMMENDED IN 25 SEPTEMBER
2010 SAPS EVALUATION

INSTALLATIONS IMPLEMENTED
BY THE DPW

COST OF INSTALLATION

Guard hut:

The existing guard hut to be upgraded
and secured to serve as a control
room.

Guard hut:

A new secured and security
equipped guard hut to be built at the
new main gate to replace the
existing one

Guard House 1

R 1,205,827.49

Guard Houses 2 & 3

R 1,367,770.87

Tuck shop:

"In order to achieve a safe and secured
environment within the premises, the

CAIjLI I ly LULlK JilUfJ IiIUjL Uc i cIULULcU

from the present position to enable the
police personnel to maintain proper
access control. A new hut (tuck shop)
must be built closer to the perimeter
protection to enable people to buy
while outside the premises."

No reference

A building consisting of the Tuck
Shop, Transformer and LV Room,
Genset Room & Refuse Area

R 956 381 16

Parking area:

As the existing parking area was open,
the entire area had to be monitored by
the CCTV camera system

No reference

Included in CCTV installation

Stud v/Off ice:

The existing study/office to be
secured, including the installation of
security doors, panic buttons, bullet
resistant glass, CCTV camera system
and reinforcement of the roof

No specific reference

Included in security measures
referred to above

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RECOMMENDED IN 28 MAY 2009
SAPS EVALUATION

RECOMMENDED IN 25 SEPTEMBER
2010 SAPS EVALUATION

INSTALLATIONS IMPLEMENTED
BY THE DPW

COST OF INSTALLATION

General recommendations:

The existing generator to be serviced
and maintained

The existing generator to be serviced
and maintained. A new standby
generator to be installed at the
premises to cater for domestic and
security requirements.

Electronic security equipment to be
connected to uninterrupted power
supply/backup

Figure 14: Comparison between the initial and subsequent SAPS recommendations and the actual installations conducted by DPW

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7.1 4.2. More than a year lapsed from May 2009 before the Security Advisory Service
of the SAPS submitted its second security evaluation report in respect of the
President's private residence, in September 2010, despite the fact that it was
represented on the Project Team throughout. A number of the security
measures recommended in the second security evaluation report, and more,
had by then already been included in the designs and estimated costing of
the Nkandla project. The report of the security consultant on the detailed
security measures was already presented to the DPW in July 2010. The
elaborate safe haven in a location different from the first Security Evaluation
Report was already in design, while the second Security Evaluation Report of
the SAPS still recommended a modest safe haven on the surface of the site.

7.14.3. I noted that the estimated costs of the Nkandla Project escalated from an
initial approximately R27 million in May 2009 to approximately R224 million in
December 2010 as a result of significant changes and additions.

7.14.4. The table below indicates the respective escalations over the period and
items added that were not reasonably directly related to the President's
security as recommended by the SAPS Security Evaluation Report.

LEGEND

A: May 2009

R 27,893,068

R 47,323,102

• Lift installation for safe haven
■ Visitors Centre

• Relocation of three households

B: Sep 2009

A: Sep 2009

R 47,323,102

R 80,836,249

• Increase in number of staff accommodation

• Increase in size and location of safe haven

B: Feb 2010

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A: Feb 2010
B: July 2010

R 80,836,249

130,604,267

• Increase in earthworks- roads, paving specification
changed

A: July 2010
B: Aug 2010

130,604,267

145,086,964

• Increase in staff accommodation

• Safe haven further extended

• Landscaping

A: Aug 2010
B: Oct 2010

145,086,964

193,533,845

• Additions to safe haven

• Landscaping

A: Oct 2010
B: Nov 2010

193,533,845

196,864,037

• Additional staff houses

A: Nov 2010

196,864,037

224,344,542

• Additional staff houses

• Laundry facility for staff houses

B: Dec 2010

• Additions to the relocation of households

Figure 15: Escalations and Significant Changes between various stages of the Nkandla Project

7.15. The Tuck Shop

7.15.1. From the security evaluation reports of the Security Advisory Service of the
SAPS obtained during the investigation and the observations made during
my site visit to the premises, it was obvious that it would not have been ideal,
from a security point of view, to have allowed the owner of the business to
continue with it at its original location. The business was relocated during the
implementation of the Nkandla Project. The new location of the small tuck
shop is at the entrance gate to the premises and consists only of a very small

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room that forms part of a larger building, which relates to the security
measures that were implemented.

7.16. The Military Clinic

7.16.1. The documentary evidence and that of Lt Gen Ramlakan show that SAMHS
is obliged, in terms of the Defence Review, that translated into a national
policy for the SANDF to provide medical care to the President

7.16.2. However, Lt Gen Ramlakan could not shed any light on the specific legal
authority for installation of stationary and permanent medical facilities at the
private residence of the President. The legal and policy frameworks he
referred me to, are generic and normative in nature. Counsel assisting Lt
Gen Ramlakan during his evidence conceded that there is no law, regulation,
policy or any other provision that authorizes the Surgeon General or the
SAMHS to request the construction of a permanent health care facility for the
President and his dependents at his private residence. He submitted that Lt
Gen Ramlakan's decision in respect of the request for the construction of the
Military Clinic at President's Zuma's private residence was a discretionary
one. However, I was not referred to any instrument that afforded Lt Gen
Ramlakan with such discretionary powers. Incidentally, DPW internal
memoranda seemed to note with concern that norms were not submitted by
the DOD. A document submitted by Gen Ramlakan as an assessment on
their part, indicates that relevant DOD Doctrines and Treasury prescripts will
suffice, where the legal framework was required.

7.1 6.3. The appraisal of what was required to enable the SAMHS to provide medical
care to President Zuma at his private residence, focused, according to Lt
Gen Ramlakan on the "worst case scenario"

7.16.4. I noted that at the time when Lt Gen Ramlakan requested the DPW to
provide a permanent health care facility at the President's private residence

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(in May 2009, shortly after President Zuma was appointed), he had a clinic
costing between R15 to R18 million in mind.

7.16.5. The appraisal considered the medical care that could be provided by the
District Hospitals in the area and found it to be inadequate. However, there is
no indication that it considered improving the facilities at these hospitals so
that it could serve the SAMHS requirements for medical care and the
community at large.

7.16.6. I could find no indication that the decision seriously considered the more
economic and sustainable option of the provision of a mobile medical facility,
as was stationed at former President Mandela's private residence, instead of
constructing a permanent structure at state expense that would be adjacent
to the President's private residence forever. According to Lt Gen Ramlakan's
evidence, medical care has been provided to the President by the SAMHS
from a temporary park home since his appointment 5 years ago. There is no
evidence that this caused any difficulty, except for the storage of drugs that
could have been accommodated in one of the many other buildings that were
constructed as part of the Nkandla Project.

7.16.7. I was referred by counsel assisting Lt Gen Ramlakan in his evidence to the
provisions of section 41 of the Constitution, providing for cooperative
governance, and specifically subsection (1)(h) that requires of all organs of
state and all spheres of government to cooperate with one another in mutual
trust and good faith by, inter alia, assisting and supporting one another and
coordinating action. The submission was that it was on the basis of this
constitutional imperative that the SAMHS cooperated with the DPW in the
Nkandla Project.

7.16.8. The evidence of Deputy Minister Bogopane-Zulu indicates that the possibility
of also utilizing the clinic for the medical and health care of the community
where the President's private residence is located was suggested by her

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when she got involved in the Nkandla Project. She believed that she was
supported in her views by the President, as she had discussed it with him. It
is worth noting that the Project Team's progress minutes indicate that soon
after the Deputy Minister left the project, Lt Gen Ramlakan reported that the
DOD had decided not to use the Military Clinic for the public.

7.16.9. In his submission, Lt Gen Ramlakan objected on the basis that it would have
been illegal to do so. He argued that the provisions of section 18 of the
Defence Act were not complied with. His explanation on why no attempt was
made to approach the President or the Minister of Defence to authorize the
sharing of the medical facilities in the interest of the community of Nkandla, in
compliance with the Act, was that it was not his responsibility to do the work
of the Minister of Health. This was in contrast with his legal counsel's opening
remarks who had said that all was done in pursuit of cooperative governance
as envisaged in section 41 of the Constitution.

7.16.10. I found Lt Gen Ramlakan's attitude in this regard astonishing, especially in
the light of his counsel's submissions on the constitutional imperative of
cooperative governance. Cooperative governance apparently never came to
Lt Gen Ramlakan's mind when he requested the construction of a medical
facility at a cost of between R15 to R20 million, for the exclusive use of the
President, his dependents and the staff looking after him, in an area where
the majority of people are impoverished and have to be satisfied with a lack
of proper medical facilities.

7.1 6.1 1 . Curiously, the Minister of Defence and Military Veterans was reported on the
DOD website on 19 February 2013 as having assessed the location and size
of the Military Clinic, it is the DOD's view that save for minor adjustments, the
clinic has adequate capacity to serve both requirements of the President as
well as to provide services to the community of Nkandla. No mention was
made of this reported view of the Minister in Lt Gen Ramlakan's evidence.

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7.16.12. Lt Gen Ramlakan also raised the issue of the security risk to the President
should the Military Clinic be utilized for the benefit of the community.
However, his contentions in this regard do not indicate why the same security
measures that apply to the President during his daily travels, locally and
abroad, could not be implemented by all the security personnel that have
houses on the site.

7.1 6.1 3. I also could find no evidence that the possibility of building the medical facility
required in respect of the President in the vicinity of his residence, but in an
area that would be accessible to ordinary members of the community, with a
view of using it also as a community health facility, in consultation and with
the assistance of the KwaZulu-Natal Department of Health, was properly
considered and explored. Deputy Minister Bogopane-Zulu's ideas were
clearly not allowed to gain any momentum.

7.1 6.1 4. Lt Gen Ramlakan's evidence that there was no community facility available at
the time when the Nkandla Project commenced where the requested medical
facilities could be placed cannot be accepted. A report of the KwaZulu-Natal
Department of Health, provided to me by Lt Gen Ramlakan and relied on by
him to show that lack of medical facilities in the Nkandla area, state that in
2009, there were at least 14 such community facilities that could have been
considered.

7.1 6.1 5. The following reference in this report, dated 5 November 201 3, is of particular
significance:

"Nkandla remains one of the most undeserved areas requiring greater effort
for the improvement of service delivery to the community at large. The
funding constraints have led to the curtailment of certain infrastructure
development projects and this exacerbates the health challenges in the area
whilst basic services have improved marginally, so too has health service
delivery. Some gains have been made with the introduction of family health

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teams, planned patient transport vehicles which persist with referrals to high
levels of care, maternity obstetric unit as well as school health promotion
teams. The response time for ambulance services is well below the norm
(less than 60 minutes in rural areas) and this is compounded by the fact that
there are no advanced life support personnel in the sub-district. .."

7.1 6.1 6. During the President's tenure and thereafter, the medical personnel deployed
to the clinic will be idle most of the time. Their services could just as well
have been utilised in the interest of the community of Nkandla, without
jeopardizing the medical care that has to be provided to the President and
staff members of the DOD and the SAPS. Additional security arrangements
could obviously have been made whenever the President had to attend at the
clinic.

7.16.17. The issue of the poor road infrastructure is also not convincing as the
President and his security entourage has access to all kinds of vehicles
provided by the state and he travels by helicopter.

7.16.18. I am also not convinced that the option of utilizing mobile structures, such as
park homes or the mobile facilities provided for Mr Mandela's medical care,
was properly considered by the SAMHS. According to Lt Gen Ramlakan, the
main consideration why park homes could not be used, was that it would be
illegal to store drugs in such a structure. I could find no confirmation for his
contentions in this regard. The Good Pharmacy Practice in South Africa, a
policy document setting minimum standards for pharmacy premises facilities
and equipment, of the South Africa Pharmacy Council, provides for the
storing of medicine in mobile facilities. The only conditions stated relate to
ventilation, insulation and hygiene standards.

7.16.19. However, even if it is undesirable, I could find no indication in the evidence
that any cheaper option than to build a clinic was considered. There is also
no evidence that the President, his dependents or the staff treated with

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medical care from park home structures on the site for the past five years
were prejudiced or worse off than they would have been, had the care been
provided from the permanent Military Clinic that was built at a cost of millions
of rand.

7.16.20. Counsel assisting Lt Gen Ramlakan in his submissions opted to draw an
analogy between the Medical Clinic that was built for the exclusive use of the
President, his dependents and the staff supporting him and the airport that
was built by the former government in George in the Western Cape, allegedly
for the late President P W Botha, whose private residence was in Wilderness,
some 23 km away. I found the logic in this argument difficult to follow. The
airport referred to is a public and not a military facility, used by several
airlines and thousands of patrons annually. It was not built on the doorstep of
where former President Botha's private residence was situated and it was not
used exclusively by him and his dependents.

7.1 6.21 . According to Lt Gen Ramlakan's evidence it was accepted from the start that
that the DPW would be responsible for the cost of the Military Clinic and that
the DOD was not regarded as a client department, is inconsistent with that of
the Acting Director General of the DPW, Mr Malebye, who indicated that it
was expected of the DOD and the SAPS to refund the DPW for the
procurement of their requests and that the DPW was therefore only regarded
as implementing agent. It is also inconsistent with the information provided by
Mr Doidge, who was the Minister of Public Works at the time when the
project started, stating that the DOD and the SAPS were of the DPW "client
departments".

7.16.22. The documentary evidence show that the Nkandla Project was paid for from
the Prestige Programme in the DPW Capital Works budget, which regularly
had to be augmented by means of reallocation from other necessary service
delivery programmes. Mr Malebye and the current Director-General of the
DPW stated during the investigation that initially, the Nkandla Project was

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supposed to have been funded by savings made on other programmes of the
Capital Works budget.

7.16.23. Lt Gen Ramlakan's version that the Military Clinic was supposed to have
been funded from a special category in the DPW budget, is therefore not
supported by the evidence of other witnesses and the documentary evidence
obtained during the investigation

7.16.24. I noted during my site visit that due to the fact that the R11 million double
storey building is located on a steep slope, substantial earth works had to be
performed in the construction of the military clinic. It also includes garages for
vehicles. I also observed that the clinic was not commissioned and the
parking garage not utilized.

7.1 7. The Helicopter Landing Pads and Crew Pavilion

7.1 7.1 . The evidence and information obtained during the investigation indicated that
the South African Air Force is responsible for the air transportation of the
President during his tenure.

7.17.2. Due to the decision taken that the President has to be transported to his
private residence by air, adequate and safe landing facilities had to be
constructed. It was also necessary to provide the helicopter pilots with
adequate rest and nutrition facilities that comply with international aviation
standards.

7.1 7.3. It was noted during the investigation that the helicopter landing pads could be
used for civil aviation purposes, once the President's term of office expired.
However, it could not be indicated with certainty who would be interested in
using a helicopter landing pad in such a rural area or that placing it closer to
community facilities where it could serve a dual purpose, was considered.

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7.18.
7.18.1.

7.18.2.
7.18.3.
7.18.4.

7.18.5.

7.18.6.

The Park Homes

The evidence indicated that the procurement of park homes as temporary
accommodation for staff was only done in March 201 1 , i.e. one year and ten
months after the Nkandla Project commenced and Mr Zuma was elected as
the President.

It could not be determined with certainty where all the affected staff stayed
from May 2009 to March 201 1 , except that a private dwelling of the President
was utilized for SAPS members.

The records of the DPW and the evidence of witnesses clearly indicated that
the decision to provide temporary accommodation was as a result of
instructions given by the Minister or Deputy Minister of Public Works

Although it is not in dispute that temporary accommodation was required for
the staff assigned to look after the security of the President, it could not be
established why this obvious need was not planned for by the DPW when the
Nkandla Project commenced.

The fact that permanent accommodation has been constructed at huge cost
to the state for the staff and that it is currently not used, is disconcerting. The
continued occupation of the park homes also deprives other state institutions
of temporary accommodation that is required by it.

The park homes belong to the state and should be utilized in a manner that
constitutes value for money.

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7.1 9. The relocation of the kraal and culvert

7.19.1. It was explained by the officials and consultants involved in the Nkandla
Project that the President's kraal for his farm animals had to be relocated for
security reasons.

7.19.2. However, during my site visit, I noted that the new kraal has an elaborate
design and that it is linked to a culvert that allows animals to exit and enter
under the fence. It was also not clear why the animals could not use a normal
gate.

7.19.3. The construction of the kraal, incorporating a chicken run and culvert, was
included in the general site works, at an estimated cost of R1 .2 million.

7.1 9.4. Although reference was made during the investigation to the relocation of the
kraal, the position of the original kraal could not be indicated to me during my
site visit. There was still a kraal at the centre of the original homestead that is
clearly being used. It was explained to me that it is only used for ceremonial
purposes.

7.19.5. During my meeting with the President in regard to the investigation on 11
August 2013, he indicated that when the movement of the kraal was
discussed, he had engaged "government on a relocated larger kraal to
accommodate his increased livestock, while keeping the existing one as a
ceremonial kraal. He further indicated that he would be amenable to
refunding the state for the cost incurred.

7.20. The Swimming Pool, Amphitheatre and Visitors' Centre

7.20.1 . The evidence indicated that the idea of a fire-pool was at some stage of the
Nkandla Project combined with the idea of building a swimming pool for the
occupants of the President's private residence.

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7.20.2. The amphitheatre was clearly designed and constructed with a view of open
air functions.

7.20.3. The Visitors' Centre forms an integral part of the entrance to the President's

private residence. It could not be established why visitors could not be
accommodated at the adjacent clinic or the guard house at the entrance
gate. At the time of my site visit, I noted that the Visitors' Centre had recently
just been used for a private function, which confirmed the impression that it
has little, if anything to do with the security of the President.

7.20.4. In the absence of clear justification for the costly choices, it is difficult not to

conclude that the designers of the project decided to create a recreational
area close to the President's dwellings, under the auspices of combining the
facilities with the need for a fire-fighting capability in terms of a water
reservoir and landscaping to rehabilitate soil. The Visitors' Centre was added
to complete the picture. There is no indication in the evidence that
alternatives, such as the installation of a water reservoir similar to the one
that was installed for household purposes, other landscaping methods and
alternative facilities for visitors were seriously considered.

7.20.5. The lack of explanation regarding why more economic options were ignored,

and the snippets regarding minutes regarding aesthetic fit (for the President)
leave a distinct impression that this was again a situation of designing the
ideal stately environment, because it is the President's residence, rather than
focusing on what was necessary and affordable.

7.21 . Relocation of Adjacent Households

7.21.1. Two different justifications can be gleaned from the evidence of why the
neighbours were moved.

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7.21.2. Mr Makhanya said it was to ensure a straight fence, while the motivation in
the relevant internal memo was "too close for security". I could find no
evidence that the possibility of keeping the households where they were and
finding alternatives for the security installations that could save the expense
of relocation, were properly investigated and considered. There was also no
indication that any comparison of the cost to adapt the security detection
systems and the fence to accommodate the households was ever made and
evaluated.

7.21 .3. It was pointed out earlier that neither of the two security evaluation reports of
the Security Advisory Service of the SAPS recommended the relocation of
the households or identified their presence as a risk to the security of the
President.

7.21 .4. It is common cause that the modest rondavels were replaced with 1 5 modern
rondavels, at a cost to the state of almost R8 million (R2 million per
household), which equates to the construction of at least 40 RDP houses.

7.21 .5. As in the case of other items referred to in this report , the only inference that
I can draw from the evidence relating to the relocation of the households is
that the DPW allowed the consultants to decide what should be done and to
design accordingly. I got the impression from the observations made during
my site visit that it was probably rather the aesthetic impact of leaving the
dilapidated structures where they were that bothered the designers of the
Nkandla project, than the impact it could have had on security.

7.22. Roads, Paving and Walkways

7.22.1. It was very obvious during my site visit that the implementation of paving at
the premises was elaborate.

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7.22.2. Although the evidence indicated that paved roads and walkways were
required in certain areas as part of the Nkandla Project, such as the patrol
roads, the construction of the swimming pool and amphitheatre included a
large area of paving, which could clearly have been avoided, if reasonable
care had been taken.

7.22.3. The impression also in this case was unavoidable that the DPW allowed the
consultants to design as they pleased and that very little, if any, consideration
was given to alternatives and the quantity of roads and paving that was really
necessary for the effective protection of the President.

7.23. The Safe Haven

7.23.1. The first Security Evaluation Report of the Security Advisory Service of the
SAPS dated 28 May 2009, recommended reinforcement of one room of the
President's dwelling with various security features identified in the Minimum
Physical Security Standards. Brigadier Adendorff stated in her evidence that
these measures were sufficient to protect the President in case of an
emergency.

7.23.2. The estimated cost of creating a safe haven as determined by R&G
Consultants in February 2010 was R457 971 . There was no indication at that
time that the more elaborate facility that was eventually built was envisaged.

7.23.3. However, by July 2010 there was already a plan to construct a security
services safe area and the estimated cost increased to more than R3 million.

7.23.4. Cost Estimate 5 prepared by R&G Consultants on 16 August 2010 clearly
indicate that a more elaborate and differently located safe haven was
designed, which was initially estimated at R8.3 million but had escalated to
about R19 million by the time this investigation was concluded.

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7.23.5. I was surprised to note that despite the fact that the more extensive facility

was already designed and costed by August 2010, the second Security
Evaluation Report of the SAPS issued in September 2010 still recommended
a modest facility on the surface. Even more disconcerting is that Brigadier
Adendorff appears to have been aware of the intention to jettison the plan for
a modest safe haven in favour of the extensive and expensive design as she
was part of the Project Team and had discussed the idea with Mr Makhanya.
As a result, the original approach on the safe haven changed substantially.

7.23.6. No reasonable explanation could be provided by the officials involved in the

Nkandla Project as to why it was decided to build the extensive and
expensive safe haven. Mr Rindel regarded it as an instruction from DPW "top
management".

7.23.7. From the evidence it appeared that the idea originated from Mr Makhanya

and that it was supported by the SAPS, despite its formal recommendation of
a far less elaborate and much cheaper option. Again, the ideal situation was
pursued rather than the necessary and affordable one.

7.23.8. At the time of the conclusion of the investigation the cost of the safe haven

had escalated to more that R19 million. The scope of this part of the Nkandla
Project started at a cost of about half a million Rand and was allowed to
increase to about R19 million, i.e. with approximately R18.5 million. The
reality is that at R19 million the safe haven still needed some work at
additional cost at the time when the investigation was concluded.

7.24. The Staff Accommodation

7.24.1 . The location of the President's private residence in a rural area about 47 km

from the nearest small town and the fact that his security involves several
staff members of the SAPS and the DOD necessitated the provision of
accommodation for them.

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7.24.2. However, there was no prescript in respect of the design of the
accommodation units nor was there any justification for anything more than a
small block of flats or barracks, instead of individual units.

7.24.3. During the site visit, I noted that the buildings constructed in this regard were
clearly designed to blend in with the thatched roof designs of the other
structures that conformed to the design of the President's houses.

7.24.4. The bachelor rondavels that were built consist of one bedroom with a kitchen
facility and a very small bathroom, which would clearly not be suitable for the
accommodation of a small family. Yet, the accommodation was built at a cost
of R17,5 million, which equates to R437 500 for a unit that is smaller than an
RDP house.

7.24.5. Lt Gen Ramlakan indicated to me that as these buildings belong to the state
and do not form part of the President's residence, it would be possible to
utilize some of it for community purposes when the President's term expires.

7.24.6. However, on questioning, it was clear that there was no plan on what the
state could use these buildings for in the future. The houses built for the staff
are not in the immediate vicinity of any community facility and it would
therefore be problematic to utilize the precinct effectively. I could find no
evidence that the possibility of locating the staff houses closer to community
facilities or to base them at the satellite police station in the Nkandla area
with a view of effective and economic utilization in the interest of the
community when the President's tenure expires, was interrogated and
considered.

7.24.7. I could also not find any reasonable indication why the possibility of
temporary accommodation in the form of park homes was not considered,
due to the fact that the accommodation would not be required indefinitely.

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7.24.8. During my site visit I noted that that some of the staff already based at the

President's private residence was in any event still living in the temporary
park homes as some of the flats had not been completed. Officials of the
DPW and the SAPS indicated that all works stopped when investigations into
the project were launched. The impact of this is that the state already paid for
buildings that are not being used, whilst temporary accommodation that could
be moved and utilized elsewhere is still being occupied.

7.25. The Private Project Manager

7.25.1. The appointment of the private Project Manager at an additional cost of R5

million was only considered when there were already substantial delays in
the completion of the Nkandla Project and after a former Minister of Public
Works started, to intervene due to the complaints of the President.

7.25.2. The evidence indicated that this could have been avoided if the DPW

planned the implementation of the Nkandla Project properly and capacitated
the Regional Office to enable it to manage the project when its scale was
known and construction commenced.

7.25.3. Mr Rindel indicated in his evidence that he realized early in the process that

the scale of the project was too large for him to handle alone. However, I
could find no indication during the investigation that he complained or
requested assistance. It should also have been obvious to Mr Khanyile, who
was directly involved, and to the DPW and other officials that formed part of
the Project Team.

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7.26. Landscaping

7.26.1. The fact that the Nkandla Project was implemented on what was previously
largely indigenous veld on a steep slope, required considerations of storm
water management and resettlement of vegetation that had to be removed.

7.26.2. However, it is the scale of the landscaping that was implemented that I found
disconcerting.

7.26.3. The evidence indicated that the Landscape Architects were subcontracted
under Mr Makhanya and that he was mainly responsible for their designs.

7.26.4. It was clear from the evidence and original designs of the Landscape
Architects that they understood their brief to create a stately residence and
the fact that it was a private residence and that the landscaping interventions
had to be paid for by public funds, had no impact on their original ideas. This
was evident from their original designs that were costed at R18.6 million,
excluding their professional fee.

7.26.5. The consideration of alternatives that were really necessary in respect of
landscaping and reasonably affordable does not seem to have been their
brief when they were appointed. They obviously designed the ideal and then
scaled down instead of looking at the real need and cost to the tax payer.

7.26.6. Despite the fact that the original design was scaled down quite dramatically,
the landscaping in the end still amounted to more than R7 million.

7.26.7. Reference is made in this report to elaborate paving of walkways, patrol
roads and the entrance area. The construction of an amphitheatre, a terrace
around the swimming pool and an area where a marquee tent can be erected
(the so called "social node") was elaborate and do not appear to relate in any
manner to the security of the President. One of the officials involved in the

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7.26.8.

7.27.
7.27.1.

7.27.2.

7.27.3.
7.27.4.
7.27.5.

project confirmed in a response to the evidence and information obtained
during the investigation that discussions relating to the areas including the
amphitheatre and the terraced pavilion that, at the time it was designed,
related to expected future functions for which the DPW would be responsible.

The unavoidable impression from my investigation is that a substantial
amount of public funds could have been saved in respect of the expenditure
incurred for landscaping, if more care had been taken by the DPW.

The Apportionment of Costs

When Deputy Minister Bogopane-Zulu became involved in the Nkandla
Project she got the impression that some of the planned expenditure might
have to be for the account of the President, as it did not relate directly to
security issues.

The document indicating an apportionment of the estimated costs between
the DPW and the President was only prepared in March 2011, i.e. one year
after the appointment of the contractors was approved and 22 months after
the Nkandla Project commenced.

I noted from the contents of the apportionment document that the majority of
items listed under "private" related to landscaping, some of which, according
to the evidence of Mr Rindel, was not implemented.

Other items that were listed for the account of the President included
"builders work", "lightning protection", "reticulation", and a portion of the "fire
pool and parking".

I could find no evidence that the President, Minister or Deputy Minister of
Public Works ever responded to the submission of the apportionment of cost
estimates.

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7.27.6.

7.27.7.

7.28.
7.28.1.

7.28.2.
7.28.3.

However, during my meetings with the Ministers of Public Works, State
Security and Police, they indicated that they were aware of the document, but
did not agree with its contents and were making further enquiries. It was not
clear to me how the document got to the Ministers as there was uncertainty
in the evidence whether it ever reached the former Minister of Public Works
and the President.

The fact that the DPW did not ensure from the time that the project
commenced that the President was informed and that his response was
obtained in respect of any planned interventions on the land that he occupied
that he might have to pay for, is a further indication of the lack of planning
and management.

PART E: THE INVOLVEMENT OF THE IDC AND ALLEGATIONS OF
IMPROPER BENEFITS AFFORDED TO THE PRESIDENT'S BROTHERS

The Financial Assistance Provided to Bonelena by the IDC

The evidence in this regard indicates that although Bonelena applied for
financial assistance from the IDC shortly before the first contract for the
Nkandla project was awarded to it by the DPW, the later awarding of the
contract was part of the information that was considered in its application.

However, the records of the IDC also contain information about other projects
that Bonelena were involved in and other contracts awarded to it.

The investigation by the IDC into the financial affairs of Bonelena was
extensive and conducted over a period of months. The fact that Bonelena
was registered at the CIDB at the time that it conducted its own due diligence
into Bonelena's affairs before it awarded it a grading of 7GB PE, was also
considered by the ICD.

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7.28.4. I found no indication in the information that could be obtained during the

investigation that the decision by the ICD to approve Bonelena's application
for financial assistance was improperly influenced or that it was not properly
considered in terms of its mandate, powers and functions.

7.28.5. The financial exposure of the IDC due to Bonelena's liquidation was

mitigated by its offer of compromise that was accepted and its discharge from
liquidation in February 2013. At the time of the conclusion of the
investigation, the ICD was in a position to continue with the recovery of the
financial assistance that it provided to Bonelena in February 201 1 .

7.29. The Allegation that the President's Brothers Benefitted from the
Security Project

7.29.1 . The allegation that two brothers of the President, Messrs Micheal and Joseph

Zuma received electrical equipment that was destined for or ordered under
the Nkandla Project and paid for by the state, was based only on the
contents of invoices that were attached to court papers relating to a civil
proceedings between a supplier (Voltex) and a contractor involved in the
Nkandla Project (Moneymine).

7.29.2. The civil claim related to a dispute about payment for certain items supplied

by Voltex to Moneymine for its different projects, including the Nkandla
Project. No other evidence or information was provided supporting the
allegations that Messrs Zuma received electrical equipment that was paid for
by the state.

7.29.3. From the investigation, it was established that the said invoices contained

references to the supply of goods to Moneymine in connection with a number
of its clients, including Messrs Zuma, "Nkandla", "dbnprestige", "vulekela",
"highflats" and others. The items that were ordered from Voltex for Messrs

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7.29.4.

7.29.5.
7.29.6.

7.29.7.

7.30.
7.30.1.

Mike and Joseph Zuma were of a general electrical nature and included
cabling, switches and sockets. The total amount of these items was
R6 278.55. It was invoiced under their names and there is no indication on
the invoices that it formed part of orders that related to the Nkandla project.

The evidence obtained during the investigation confirmed that Moneymine
had a number of other clients during the period that it was involved in the
Nkandla Project. It is an established construction company and has been
doing business in the KwaZulu-Natal Province for years. The address and
references that appeared on the invoices were also not related to the
Nkandla Project or the President's private residence.

I could find no evidence in the payment certificates and other procurement
documents of the DPW relating to the Nkandla Project or from the witnesses
interviewed that Moneymine or Voltex was paid by the DPW for items that
Messrs Joseph and Mike Zuma purchased.

The explanation provided by Mr and Mrs Mfeka of Moneymine that Messrs
Mike and Joseph Zuma ordered the items concerned as separate clients in
terms of their own small projects, was supported by the contents of the
invoices and also the information provided by Voltex.

Accordingly, I could find no substance during the investigation for the
allegations in this regard which could have warranted further investigation.

The Evidence in Respect of the President's Involvement in the Project

The evidence indicates that officials of the DPW and the SAPS met with the
President at his private residence on 12 August 2009 to inform him of the
security measures that were to be installed at his three new dwellings, the
construction of which commenced on 24 August 2009. The minutes of a
Progress Meeting held shortly after the Deputy Minister was taken off the

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project seem to suggest that the matters she raised with the President were
resolved.

7.30.2. In his submissions on the evidence and information obtained during the
investigation, dated 14 February 2014, the President stated that at this
meeting he introduced Mr Makhanya as his architect to senior government
officials "and to appraise each other of their respective plans." He denied
influencing Makhanya's appointment as Principal Agent.

7.30.3. By May/June 2010 the President complained about the slow progress made
with the implementation of the Nkandla Project, which was impacting on his
private and family life.

7.30.4. The President stated in his submissions in this regard that "my request to
expedite the construction was a genuine attempt to address the delays and
not to otherwise influence the process. "

7.30.5. According to the evidence Mr Makhanya supposedly had discussions with
the President about the landscaping of the premises in August 201 and May
201 1 . He also presented the President with the design of the swimming pool.
In fact there are numerous references to reported or contemplated design
meetings between the two in the project progress minutes alluded to in the
evidence.

7.30.6. Deputy Minister Bogopane-Zulu stated in her evidence that the President
supported her idea that the fire pool should converted into a swimming pool
to be used by the children of the village. She labelled this a developmental
approach. The evidence further indicates that Mr Makhanya apparently
discussed the possibility of private costing in respect of the conversion of the
fire-pool to a swimming pool with the President as well as "infrastructure
requirements. "

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7.30.7. It is common cause that the President requested a former Minister of Public
Works, Mr G Doidge, to look into the delay of the project, as a result of which
the latter got directly involved in order to expedite the process.

7.30.8. The evidence further show that the former Minister of Public Works, Ms
Mahlangu-Nkabinde, informed the President in writing, on 5 November 2010,
of the details of the progress made with the implementation of the Nkandla
Project. According to the evidence of officials of the DPW, it was their
impression that the President indicated that he was satisfied with the
progress report presented to him.

7.30.9. When Deputy Minister Bogopane-Zulu became involved in the Nkandla
project, she, according to her evidence, discussed the details thereof with the
President. According to her, he raised concerns about the relocation of the
households as he has known them all his life and he did not want them to be
prejudiced. The President also told her that he did not want new contractors
on the site. He indicated that he was opposed to more contractors being
involved during phase 2 of the project than those that were implementing
phase 1 .

7.30.10. Deputy Minister Bogopane-Zulu further indicated in her evidence that the
President supported her idea that the Military Clinic should also be used for
community purposes. The minutes corroborate anticipated discussions
between these two in this regard.

7.30.11. The minutes of a Progress Meeting held on 28 September 2011 recorded
that Mr Makhanya stated that the President had raised his concern about the
slow progress of the Nkandla Project and that the premises might not be
available for him to use during December 201 1 .

7.30.12. The evidence of Brigadier Adendorff and Mr Rindel also indicated that the
President raised his concern about the design of the bullet resistant windows

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7.30.13.

7.30.14.

7.31.
7.31.1.

7.31.1.1

7.31.1.2

7.31.1.3
7.31.1.4
7.31.1.5

that had to be installed. This resulted in a change of the design that was
implemented.

As already alluded to above, the President indicated to me during the
investigation that he was involved in the decision to build a new kraal. In his
response to the Provisional Report, the President did not deny this.

I could find no evidence or indication that the President ever enquired into the
scale of the Nkandla Project that was being implemented at his private
residence or the cost thereof.

The President's Reply to My Questions:

The statement that the President provided to me in response to written
questions put to him relating to the matters investigated confirmed that he:

Initiated private improvements of his private residence at Nkandla and
appointed Minenhle Makhanya Architects in this regard;

Was briefed by former Minister Doidge and senior officials of the SAPS and
other government departments on the security requirements that had to be
implemented at his private residence, shortly after he took office;

Was present at a meeting between these officials and Mr Makhanya where
the impact of the security measures on his private dwellings was discussed;

Received briefings on the project from time to time from various Ministers
and Mr Makhanya;

Expressed his concern about the delay in the implementation of the project;
and

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7.31.1.6

7.31.2.

7.31.3.

7.31.4.

7.31.4.1

7.31.4.2

7.31.4.3

7.31.4.4

7.31.4.5

Complained about the initial design of the bullet resistant windows that was
installed.

The President declined the opportunity to respond to the allegation that he
misled Parliament by making a false statement about the financing of the
private development at his private residence and referred me to Parliament in
this regard. He also declined me the opportunity to have access to his bond
documents.

However, with the assistance of the Director-General of the Presidency, I
established on 17 December 2013 from the Register of Financial Interests
that the President has declared a mortgage bond in respect of his private
residence at Nkandla since 2009. I was also given the assurance by the
President's legal team that the mortgage bond is still in place

The President furthermore did not respond to my questions in connection
with:

Whether he or the Presidency requested that security measures be installed
at his private residence;

Whether he was at any stage informed of the cost of the proposed security
measures;

Whether a notice declaring his private residence a National Key Point was
served on him;

What he understood to be his responsibilities as the owner of a National Key
Point;

What measures he took to secure his private residence as required by the
National Key Points Act;

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7.31.4.6 Whether he was advised that some of the cost of securing his private
residence as a National Key Point would be recovered from him;

7.31 .4.7 Whether he was presented by Mr Makhanya with the designs of the project;

7.31 .4.8 Whether he received the letter consisting of a detailed report on the progress
made with the project that was addressed to him by former Minister
Mahlangu-Nkabinde on 5 November 2010;

7.31.4.9 Whether he received the document setting out the apportionment of cost for
the project that was prepared by the DPW;

7.31.4.10 Whether Deputy Minister Bogopane-Zulu discussed the conversion of the
fire-pool to a swimming pool with him and whether he was aware of the
reasons for this conversion;

7.31.4.1 1 Whether he was consulted about the relocation of the households that were
affected by the implementation of the project;

7.31.4.12 Whether he was opposed to more contractors working on the site during
phase 2 of the project;

7.31.4.13 Whether Deputy-Minister Bogopane-Zulu discussed the design of the Military
Clinic with him;

7.31.4.14 Whether he would be willing to disclose the amount that he paid for the
construction of the new dwellings on his property;

7.31 .4.1 5 How often he uses his private residence for official business;

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7.31.4.16 Why he would prefer using his private residence for official business rather
than one of the official residences available to him;

7.31 .4.1 7 Whether he at any stage enquired into the cost of the project; and

7.31.4.18 If not, whether he as the head of state did not feel obliged to do so as a
substantial amount of public money was obviously being spent.

7.31.5. On 13 January 2014, I provided the President with a copy of my Provisional
Report on the investigation and afforded him the opportunity to respond to
any information or evidence that appeared to implicate him.

7.31.6. The President provided me with submissions on the contents of the
Provisional Report on 14 February 2014, which were presented to me by the
legal team assisting him, on 21 February 2014.

7.31.7. In his submissions, the President referred to my compliance with the
Executive Members Ethics Act and my views on the application of the
National Key Points Act.

7.31 .8. Referring to how the contents of the Provisional Report, in his view, related to
him as a person, the President stated, inter alia, that:

"At no stage have I been appraised of the fact that my conduct forms part of
any investigation either by the Public Protector or any other institution and my
statement is framed in the light of this appreciation.

It now appears apparent that unbeknown to me, my conduct, ethical and
otherwise in fact forms part of the Public Protector's investigation.

Had I in fact known that my conduct was under investigation by the Public
Protector, I most probably would have elected to approach the matter

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differently, not least of which would have been to persist in my request by all
means possible for access to the documents and statements upon which
certain assertions were based.

I consider this to be unfair and a breach of my constitutional right to be made
aware of my role in the investigation and the case that I have to meet.
Consequently, this impacts on the findings and evaluations contained in the
report insofar as they relate to me. I have no way, notwithstanding the
opportunity to comment on this provisional report, to address this apparent
procedural unfairness.

The Public Protector is aware that I have made repeated requests to be
furnished with copies of documents which are the bases for certain
averments and allegations in order that I may better understand the context
and import of such.

These requests have been consistently denied under the blanket approach of
protecting the identity of the complainants/witnesses, notwithstanding that
fact that some of these persons are known to me, others government
officials, others still political leaders and oft quoted academics. "

7.31.9. I was quite astonished by these submissions of the President, for the
following reasons:

7.31.9.1 Shortly after I received the first complaint in connection with the security

upgrades at the President's private residence on 13 December 2011, I
informed the Director-General of the Presidency of the complaint and met
with him in regard thereto in January 2012. I believe that it was reasonable to
accept that Dr Lubisi informed the President accordingly.

7.31.9.2 On 15 February 2012, I wrote to the President directly, informing him of the
complaint that I received from a member of the public that was based on the

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article published by the Mail & Guardian newspaper on 11 November 2011
(referred to in paragraph 2.1 above) and that I would be investigating the
matter.

7.31 .1 0. I informed Dr Lubisi accordingly in writing on the same day.

7.31.1 1. On 20 February 2012, I received an acknowledgement of receipt of my letter
addressed to the President from the Administrative Secretary: Presidential
Support Services that stated that it was received and would be brought to his
attention.

7.31 .1 2. I received further complaints in December 201 2.

7.31.13. In my letter addressed to the President dated 29 January 2013, I informed
him of the further complaints and stated inter alia that:

"The Parliamentary Leader of the Democratic Alliance, Ms L Mazibuko,
lodged a further complaint against you in terms of the provisions of the
Executive Members' Ethics Act, 1998. Her complaint is based on allegations
published by the media on 2 December 2012, allegeing that Messrs Michael
and Joseph Zuma, members of your family, benefitted improperly from the
development project at your private residence when they received supplies
destined for it, delivered to their komes. Ms Mazibuko requested that I
establish whether these allegations are true, and if so whether or not it
constituted conduct in violation of the Executive Ethics Code on your part.

Prof P De Vos of the University of Cape Town lodged a complaint with me
relating to a statement that you made in the National Assembly on 15
November 2012, when you reportedly indicated that the development of the
first phase of your private residence was financed by a commercial bank that
secured a mortgage bond in respect of the property."

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7.31 .1 4. I further explained to the President that subsequent media reports suggested
that no such bond was registered and that, according to Prof De Vos there is
no clarity whether the non-security related construction works at his private
residence was indeed financed by him. I stated that:

"He (Prof De Vos) contends that it is in the public interest for the Public
Protector to determine whether you 'willfully mislead' the National Assembly
in regard to this matter, which in his view, would constitute a violation of the
Executive Ethics Code. "

7.31.15. In addition, I requested the President to provide me with a copy of the
registered bond and other relevant documents relating to his financing of his
private residence.

7.31.16. On 11 March 2013, I informed the President that my investigation was
progressing and requested him to provide me with the documents previously
requested. My office received an acknowledgement of receipt from the Chief
of Staff in the Private Office of the President, on 12 March 2013.

7.31.17. Mr J S Mabelane, the Acting Head: Legal and Executive Services of the
Presidency wrote to me on 4 April 2013, requesting copies of the complaints
referred to in my letters addressed to President on 29 January 2013 and 13
March 2013.

7.31.18. In my response on 11 April 2013, I explained the reasons why the Public
Protector, as a matter of principle, does not provide interested and affected
parties with copies of letters of complaint. However, I provided him with a
detailed outline of the complaints, which I also included in the Provisional
Report that was provided to the President on 14 January 2014.

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7.31.19. On 29 July 2013, I wrote to the President, informing him of my intended visit
to the Nkandla Project and again requested the information previously
requested that was still not provided.

7.31.20. I met with the President on 11 August 2013 in connection with my
investigation and presented him with a set of written questions with the
relevant documents, which he agreed to respond to.

7.31.21. The Director-General in the Presidency addressed a letter to me on 10
September 2013 requesting information to enable the President to respond to
the questions presented to him on 1 1 August 2013.

7.31.22. The President responded to me on 30 September 2013 as indicated in
paragraph 6.86 above.

7.31 .23. Due to fact that I was concerned that the President had not responded fully to
all my questions, I provided a further opportunity in my letter addressed to
him on 8 October 2013.

7.31.24. In his response, dated 24 October 2013, the President, requested more

information, to which I responded in detail on 29 October 2013. I attached to
my response copies of documents that had already been provided to him
earlier, which included:

7.31.24.1 The Declaration Certificate declaring his private residence a National Key
Point signed by the Minister of Police on 8 April 201 0;

7.31.24.2 The Internal Memorandum signed by the former Minister of Public Works on
5 November 2010 informing the President in detail of the progress made with
the implementation of the Nkandla Project; and

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7.31.24.3 A document dated 11 March 2011 prepared by R&G Consultants and the
DPW setting out the apportionment of costs of the Nkandla Project.

7.31.25. The correspondence with the President and the Presidency referred to
above, my personal meeting with him and the fact that the President was
provided with a copy of my Provisional Report of more than 300 pages
setting out in detail the complaints that I received and the issues that were
investigated, in my respectful view, provided the President with sufficient and
detailed information to enable him to respond to areas of the evidence and
information that appeared to implicate him.

7.31 .26. I therefore could not find any merit in his submissions that he was unaware of
my investigation and the complaints lodged against him and that he was not
provided with sufficient evidence and information to enable him to respond
thereto. I informed the President accordingly in a letter addressed to him on 4
March 2014 in response to his submissions, setting out the sequence of my
interactions with him and the Presidency relating to my investigation,
attaching copies of the relevant correspondence.

7.31.27. In concluding his submissions of 14 February 2014, the President expressed
the views that the investigation was "allowed to drag on for a lengthy period
with all manner of comments and judgments by all and sundry." He also
referred to the leaking of what purported to be versions of my Provisional
Report to the media and the impact that it, in his view, had on the
investigation and the integrity of the office of the Public Protector.

7.31.28. In summary, the President submitted that my Provisional Report:
"Is tainted by lack of proper procedure;

Has not applied the rules of natural justice;

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Suffers from a lack of integrity in that this has been compromised by
persistent leaks and public pronouncements;

Has adopted the incorrect legal framework in assessing the implementation
of the security upgrades. "

7.31.29. As I have already indicated, all the affected and interested parties were
afforded a full opportunity to engage me on the evidence and information
obtained during the investigation that appeared to implicate them. I have
considered every comment and submission, including that of the President
for the purpose of this final report and made changes and corrections, where
applicable to my provisional views, conclusions and findings. I have also
alluded in detail to compliance with the relevant legislation and legal
processes, after having considered the submissions made in this regard by
the different parties, including the President.

7.31.30. Earlier in the report I have addressed the concerns regarding leaks and
delays. I have also addressed the procedural fairness. In my respectful view,
the President's concerns have no basis in fact or law.

8. THE LEGAL AND REGULATORY FRAMEWORK

8.1 . The Legal Framework Regulating the Ethical Conduct of the President
and Other Members of the Cabinet and that of Deputy Ministers

8.1.1. The Constitution

8.1.1.1 Section 83 provides that the President is the Head of State and that he/she
must uphold, defend and respect the Constitution as the supreme law of the
Republic.

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8.1 .1 .2 The Cabinet consists, in terms of section 91 , of the President, as head of the
Cabinet, a Deputy President and Ministers.

8.1.1.3 Members of the Cabinet are, by virtue of the provisions of section 92(2),
collectively and individually accountable to Parliament for the exercise of their
powers and the performance of their functions. They must, in terms of section
92(3) act in accordance with the Constitution.

8.1 .1 .4 Section 96 provides that:

"(1) Members of the Cabinet and Deputy Ministers must act in accordance

with a code of ethics prescribed by national legislation.
(2) Members of the Cabinet and Deputy Ministers may not

(a) undertake any other paid work;

(b) act in a way that is inconsistent with their office, or expose
themselves to any situation involving the risk of a conflict between their
official responsibilities and private interests; or

(c) use their position or any information entrusted to them, to enrich
themselves or improperly benefit any other person. "

8.1.2. The Executive Members' Ethics Act

8.1 .2.1 Section 2 of this Act provides for the publishing by the President of a code of
ethics, as contemplated by section 96 of the Constitution.

8.1 .2.2 The Public Protector must, by virtue of the provisions of sections 3 and 4
investigate complaints against a Cabinet member (which includes the
President) or a Deputy Minister when it is lodged by a member of the
National Assembly.

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8.1 .2.3 A report on the investigation against a Cabinet member must, in terms of

section 3, be submitted to the President, who has to submit a copy thereof
and any comments thereon to the National Assembly within 14 days,
together with a report on any action taken or to be taken in regard thereto.

8.1.3. The Executive Ethics Code

8.1.3.1 This Code was published in terms of section 2 of the Executive Members'
Ethics Act.

8.1 .3.2 Paragraph 2 requires of Cabinet members inter alia to:

(a) perform their duties and exercise their powers diligently and honestly;

(b) act in good faith and in the best interest of good governance;

8.1 .3.3 Paragraph 2.3 provides, inter alia, that members may not act in a way that is
inconsistent with their position.

8.1 .3.4 When considering appropriate international bench marks I came across the

Code of Ethics for US Government Service, which constitutes a transversal
Code of Ethics for all public office bearers and employees in the United
States of America (USA). The Code provides that :

" Any person in Government service should:

1. Put loyalty to the highest moral principles and to country above loyalty to
Government persons, party, or department.

2. Uphold the Constitution, laws, and legal regulations of the United States
and of all governments therein and never be a party to their evasion.

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3. Give a full day's labor for a full clay's pay; giving to the performance of his
duties his earnest effort and best thought.

4. Seek to find and employ more efficient and economical ways of getting
tasks accomplished.

5. Never discriminate unfairly by the dispensing of special favors or privileges
to anyone, whether for remuneration or not; and never accept for himself or
his family, favors or benefits under circumstances which might be construed
by reasonable persons as influencing the performance of his governmental
duties.

6. Make no private promises of any kind binding upon the duties of office,
since a Government employee has no private word which can be binding on
public duty.

7. Engage in no business with the Government, either directly or indirectly
which is inconsistent with the conscientious performance of his governmental
duties.

8. Never use any information coming to him confidentially in the performance
of governmental duties as a means for making private profit.

9. Expose corruption wherever discovered.

10. Uphold these principles, ever conscious that public office is a public
trust."

8.1 .3.5 While our Constitution is brief on the specific provisions regarding ethics, if
we take the provisions of section 195 on principles of public service and
section 237 of the Constitution requires that constitutional obligations be
performed diligently and without delay. This import of our constitutional
architecture on the ethical standards expected of public office bearers and I
believe, officials cannot be far from the 10 ethical standards expected of all

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persons entrusted with public power and control over public resources in the

8.1 .3.6 At a workshop on ethics, hosted by the Joint Chairpersons of the

Parliamentary Joint Committee on Ethics and Members Interests, it was
agreed that a universal code of ethics for all entrusted with public power and
control over public resources should be developed and implemented
throughout the public sector and that there were gaps in the Parliamentary
Codes of Ethics, the Executive Code of Ethics and other sector codes, which
should also be addressed.

Implementation of Security Measures at the Private Residence of the
President

8.2.1. The Application of the Ministerial Handbook as Approved by the Cabinet on 7
February 2007

8.2.1.1 The Ministerial Handbook ("the Handbook") regulates the privileges to which
members of the Executive are entitled, by virtue of the offices that they
occupy.

8.2.1.2 A "member" is, for the purposes of the application of the provisions of the

Handbook defined as a Minister, Deputy Minister, Premier, Member of the
Executive Council (MEC) and a Presiding Officer/Deputy Presiding Officer in
Parliament or in the Provincial Legislature, except in cases where specific
categories of the above members are mentioned as national or provincial
members.

8.2.1.3 The President is therefore not a "member" of the Executive for the purposes
of the general application of the provisions of the Handbook.

USA.

8.2.

The Legal and Policy Framework Regulating the Installation and

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8.2.1 .4 Chapter 4 that deals with residences only applies to "members".

8.2.1 .5 Annexure E to the Handbook consists of the Policy on Security Measures at
the Private Residences of Public Office Bearers, which was approved by the
Cabinet on 1 1 June 2003.

8.2.1.6 This Policy provides that that the Minister of Public Works may approve a

state contribution of a non-recoverable maximum amount of R100 000 in
respect of security measures taken at the private residence of a public office
bearer. If the cost exceeds R100 000, the difference shall be paid by the
public office bearer.

8.2.1.7 It should be noted in this regard that the Remuneration of Public Office

Bearers Act, 1998 excludes the President specifically from the definition of
"office bearer". This is also evident from the fact that the salary, allowances
and benefits of the President are provided for separately in this Act.

8.2.1 .8 It is furthermore clear from the provisions of Annexure E that the initiative for

security measures has to be that of the Public Office Bearer, who has to be
satisfied with the cost estimation and is responsible for contracting with
service providers. The involvement of the DPW is limited to assisting with
determining the scope and costs of the measures to be taken and providing a
financial contribution of not more than R100 000.

8.2.1 .9 Annexure E therefore clearly does not apply to the project referred to in this
report.

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8.2.2.
8.2.2.1

8.2.2.2
8.2.2.3

8.2.2.4
8.2.2.5
8.2.2.6
8.2.2.7
8.2.2.8

The Cabinet Policy: Security Measures at the Private Residences of the
President, Deputy President and former Presidents and Deputy Presidents,
approved on 20 August 2003

This Cabinet Policy provides that at the request of the President or the
Presidency , the SAPS together with the National Intelligence Agency (NIA)
(now the State Security Agency) evaluate the security situation of private
properties that are owned and regularly used by the President, and in
exceptional circumstances, his immediate family.

The evaluation is based on a threat analysis conducted by the NIA.

Based on the evaluation the SAPS and the NIA have to formulate a proposal
on appropriate security measures (staff and structures) that should be put in
place by the State. These measures have to be submitted to the Inter-
Departmental Security Coordinating Committee, for technical assessment.

The DPW then has to prepare cost estimates of the proposed structural
security measures and submit it to the SAPS.

Thereafter, the SAPS have to advise the Minister of Police on the proposed
safety measures, including the cost thereof.

Whatever measures are accordingly approved by the Minister of Police shall
be communicated to the President for his or her consent.

The SAPS then has to submit the measures, as approved by the President to
the Minister of Public Works for approval of the structural components.

The security measures agreed to in the above process have to be
implemented as follows:

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(a)
(b)

8.2.2.9

8.2.3.
8.2.3.1

8.2.3.2

8.2.3.3
8.2.3.4

SAPS personnel and related costs have to be provided and funded by the
SAPS;

structural additions and amendments have to be provided, maintained and
funded by the DPW.

This Policy further provides that the security situation at the private residence
of the President shall from time to time be revisited by the SAPS based on
the findings of a threat analysis done by the NIA. The SAPS has to report its
findings to the Minister of Police. This may at any time lead to the upgrading,
downgrading or termination of security measures.

The National Key Points Act, 1 980

Section 2 of this Act provides that if it appears to the Minister of Police at any
time that any place is so important that its loss, damage, disruption or
immobilization may prejudice the Republic, or whenever he/she considers it
necessary or expedient for the safety of the Republic or in the public interest,
he/she may declare that place a National Key Point.

When in the opinion of the Minister it will contribute to the safeguarding of
two or more National Key Points if certain steps in respect of their security
are taken jointly by their owners, he may, in terms of section 2A(1), declare,
those Key Points a National Key Points Complex.

The owner of the affected place has to be provided with a written notice of
the declaration.

Section 3 provides further that on receipt of the notice, the owner , after
consultation with the Minister of Police, has to take steps at his/her own
expense and to the satisfaction of the Minister in respect of the security of the
place.

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8.2.3.5 Should the owner fail to take such steps, the Minister may by written notice in
terms of section 3(2) order him/her to take within a specified time in the
notice and at his or own expense take such steps in respect of the security of
the Key Point as may be specified in the notice. If the owner without
reasonable cause refuses or fails to comply with the notice, it amounts to a
criminal offence .

8.2.3.6 If the owner refuses or fails to take the steps specified in the said notice
within the period specified, the Minister may take or cause to be taken the
steps and may recover the cost thereof to such extent that the Minister may
determine.

8.2.3.7 Section 3A affords the Minister of Police with the power to take over the
duties of the owner to secure the place declared as a National Key Point.
He/she may do so at any time and will then be acting on behalf of and with
the consent of the owner to take the steps or cause it to be taken, which are
or may become necessary to secure the National Key Point. The owner shall
in such a case be liable for the cost of the steps taken to the extent
determined by the Minister.

8.2.3.8 A Special Account for the Safeguarding of National Key Points is established
in terms of section 3B of this Act. It provides that money appropriated by
Parliament is paid into the account, as well as money recovered from the
owner of a National Key Point.

8.2.3.9 The moneys in the account are to be utilised, inter alia, to render assistance
to the owner of a National Key Point in respect of the steps that need to be
taken to secure the place.

8.2.3.10 The Minister of Police has to designate a person in the service of the State to
be the accounting officer of the account.

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8.2.3.11 The account is to have its own bank account and has to be audited by the
Auditor-General.

8.2.4. The South African Defence Review

8.2.4.1 In May 1996, Parliament approved the White Paper on National Defence for
the Republic of South Africa that constituted the Defence Policy for the new
democratic state.

8.2.4.2 The White Paper provides for a Defence Review, the aim of which was to
elaborate on the Defence Policy Framework.

8.2.4.3 The South African Defence Review was issued in 1998. Chapter 7 of the
Defence Review provides for the Non-Military tasks to be performed by the
South African National Defence Force (SANDF).

8.2.4.4 Paragraph 9 of this Chapter states that the SANDF provides VIP air transport
for the President, the Deputy President, the Minister and Deputy Minister of
Defence and, where capacity allows, for other Cabinet Ministers and
Premiers.

8.2.4.5 Paragraph 22 provides that:

"The SAMHS (South African Military Health Service) also provides medical
care to the President, the Deputy President, the Minister and Deputy Minister
of Defence and, at the request of the Department of Foreign Affairs, foreign
VIPs visiting South Africa."

8.3. The Relevant Provisions Relating to the Protection of Information
Pertaining to the Security Measures Implemented at the Private
Residence of the President

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8.3.1. The Cabinet Policy: Security Measures at the Private Residences of the
President, Deputy President and former Presidents and Deputy Presidents,
approved on 20 August 2003

8.3.1.1 The Cabinet Policy does not contain any reference to the protection of
information that relate to the security measures implemented at the
President's private residence.

8.3.2. The National Key Points Act, 1980

8.3.2.1 Section 1 0(2) of this Act provides in this regard that:

"Any person who furnishes in any manner whatsoever any information
relating to the security measures , applicable at or in respect of any National
Key Point or in respect of any incident that occurred there, without being
legally obliged or entitled to do so , or without the disclosure or publication of
the said information being empowered by or on the authority of the Minister,
except as may be strictly necessary for the performance of his functions in
regard to his employment in connection with, or his ownership of, or as may
be necessary to protect, the place concerned, shall be guilty of an offence
and on conviction liable to a fine not exceeding R10 000 or to imprisonment
for a period not exceeding three years or both such fine and such
imprisonment, (emphasis added).

8.3.3. The Protection of Information Act, 1982

8.3.3.1 The relevant provision that applies to the information referred to in this report
is section 4 of this Act.

8.3.3.2 It provides that any person who discloses information that is in his or her
possession or under his/her control or at his/her disposal on account of

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holding an office under the Government, that he/she knows or should
reasonably know, the security or other interests of the Republic demands to
be kept secret, to anyone other than:

(a) someone lawfully entitled to it; or

(b) someone to whom he/she has a duty to disclose it in the interests of the
Republic shall be guilty of an offence.

8.3.4. The Minimum Information Security Standards

8.3.4.1 The Minimum Information Security Standards (MISS) is the National
Information Security Policy, approved by the Cabinet on 4 December 1996.

8.3.4.2 The Preface to this Policy states that it was compiled as an official
government policy document on information security, which must be
maintained by all institutions that handle sensitive or classified material.

8.3.4.3 Chapter 1 of the Policy provides that government institutions should compile
its own rules of procedure in respect of the protection of information, based
on the minimum standard set by the Policy. In so doing, it is expected of all
institutions to strive for reconciliation between the requirements of sound
administration and effective security.

8.3.4.4 The classification of official matters is referred to in Chapter 2. Paragraph 2
of this Chapter provides that the head of an institution is responsible for the
classification of a document. Paragraph 1 .2 of Chapter 4 states in this regard
that:

"The responsibility for the gradings and regradings of document
classifications rests with the institution where the documents have their

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origin. This function rests with the author or head of the institution or his (or
her) delegate(s)."

8.3.4.5 The head of an institution is defined by paragraph 21 of Chapter 2 as:

"The person who is serving as the head of the institution, whether defined by
law or otherwise, including the official acting in his place".

8.3.4.6 The classification can, in terms of paragraph 3.1 , be as follows:

(a) Restricted;

(b) Confidential;

(d) Top Secret.

8.3.4.7 The following note appears under paragraph 3.4 of Chapter 2 of the Policy:

"Security measures are not intended and should not be applied to cover up
maladministration, corruption, criminal actions, etc, or to protect
individuals/officials involved in such cases."

8.3.4.8 The definition of the classification of "Top Secret", which is relevant to the
matters referred to in this report, is, in terms of paragraph 3.4.4. of Chapter 2
of the Policy, as follows:

"TOP SECRET is the classification given to information that can be used by
malicious/opposing/hostile elements to neutralise the objectives and
functions of institutions and/or state. "

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8.3.4.9 The test to be applied to determine whether information should be classified
as TOP SECRET is whether the compromise thereof:

(a) "can disrupt the effective execution of information or operational
planning and/or plans;

(b) can seriously damage operational relations between institutions;

(d) can result in the declaration of war."

8.3.4.10 The following explanation of the classification is provided:

"TOP SECRET is used when the compromise of information results in:

The functions of a state and/or institution being brought to a halt by
disciplinary measures, sanctions, boycotts or mass action;
The severing of relations between states; and
a declaration of war. " (emphasis added)

8.3.4.1 1 "Compromise" is defined in paragraph 7 of Chapter 2 as:

"The unauthorised disclosure/exposure or loss of sensitive or classified
information, or exposure of sensitive operations, people or places, whether
by design or through negligence." (emphasis added)

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8.4.

The Legal and Policy Framework Regulating the Procurement of Goods
and Services by the DPW

8.4.1. Legal framework

8.4.1.1 Section 217 of the Constitution is the basis upon which all procurement

practices within the public sector are developed. The Constitution demands
that when an organ of state contracts for goods and services it must do so in
accordance with a system which is fair, equitable, transparent competitive
and cost effective.

8.4.1.2 In terms of section 195, the public administration must be governed by the
democratic values and principles enshrined in the Constitution, including the
promotion of the efficient, economic and effective use of public resources.

8.4.1.3 The key instrument regulating procurement is the Public Finance
Management Act, 1999 (PFMA) the purpose of which is set out in the
preamble to the Act, that reads as follows:

"To regulate financial management in the national government and provincial
governments; to ensure that all revenue, expenditure, assets and liabilities of
those governments are managed efficiently and effectively; to provide for the
responsibilities of persons entrusted with financial management in those
governments; and to provide for matters connected therewith. "

8.4.1.4 In terms of section 76(4)(c) of the PFMA, the National Treasury may make

regulations or issue instructions applicable to all institutions to which the
PFMA applies concerning, inter alia, the determination of a framework for an
appropriate procurement and provisioning system which is in keeping with
the dictates of Section 217(1) of the Constitution.

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8.4.1.5 The DPW business processes require a client Department to confirm
availability of funding prior to the procurement process being embarked upon.
The DPW, upon receiving a request to satisfy a need, embarks upon a
process of estimating the costs to the client Department. This document
allows the client Department to estimate the costs it would possibly incur and
allows the Department to assess its budget and to plan for future budgets.

8.4.1.6 The Supply Chain Management (SCM) framework is set out in Regulation
16A of the Treasury Regulations, which are applicable to all departments in
national and provincial governments.

8.4.1.7 The Treasury Regulations set out the areas that form the SCM framework
and this is to be found in Regulation 16A.3.2 which reads as follows:

"A supply chain management system referred to in paragraph 16A.3. 1 must -

(a) be fair, equitable, transparent, competitive and cost effective;

(b) be consistent with the Preferential Procurement Policy Framework Act,
2000 (Act No. 5 of 2000);

(d) provide for at least the following: -

(i) demand management;

(ii) acquisition management;
(Hi) logistics management;

(iv) disposal management;

(v) risk management; and

(vi) regular assessment of supply chain performance."

8.4.1.8 Regulation 11(a) of the Regulations issued in terms of the Preferential
Procurement Policy Framework Act, 2000, provides that an organ of state
must, prior to making an invitation for tenders properly plan for and as far as

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possible, accurately estimate the costs of the provision of services or goods
for which an invitation for tenders is to be made.

8.4.2. Supply Chain Management Guidelines

8.4.2.1 In February 2004, the National Treasury issued a document entitled "Supply
Chain Management: A Guide for Accounting Officers/Authorities" (SCM
Guide). The purpose of the SCM Guide was to give guidance to accounting
officers in fulfilling their roles within the SCM framework.

8.4.2.2 Paragraph 3 of the SCM Guide sets out guidelines in regard to demand
management and reads as follows:

"Demand management

3. 1 Introduction

3.1.1 Demand management is the first phase of SCM. The objective is to
ensure that the resources required to fulfil the needs identified in the
strategic plan of the institution are delivered at the correct time, price
and place and that the quantity and quality will satisfy those needs.
As part of this element of SCM, a total needs assessment should be
undertaken. This analysis should be included as part of the strategic
planning process of the institution and hence will incorporate the
future needs.

3. 1.2 It is vital for managers to understand and utilise sound techniques to
assist them in their planning, implementation and control activities.
As part of the strategic plan of the institution, resources
required for the fulfilment of its obligations should be clearly
analysed . This includes a detailed analysis of the goods, works and
services required, such as how much can be accomplished, how
quickly and with what materials, equipment, etc." (emphasis added)

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8.4.2.3 This Guide is applicable to all accounting officers and contains the following

principles:

(a) The identification of a need is the initiating trigger to a procurement
process.

(b) The fulfilment of the need should form part of the strategic objectives of
the department and a needs analysis should therefore be part of the
strategic planning process.

(d) The need should be linked to the budget.

8.4.2.4 Paragraph 1 .3.2.2 of the SCM Guide states that Demand Management is the

beginning of the supply chain where:

(a) a needs assessment is done to ensure that goods or services are
acquired in order to deliver the agreed service;

(b) specifications are precisely determined;

(d) the supplying industry has been analysed.

8.4.2.5 Planning therefore plays an integral part in supply chain management.

8.4.3. The Government Immovable Asset Management Act, 2007 (GIAMA)

8.4.3.1 The purpose of this Act is to provide a framework for the management of

immovable assets held by a national or provincial department and to provide

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minimum standards in respect of immovable asset management. Section 5 of
the Act sets out the principles of asset management and reads as follows:

"(1) The following are principles of immovable asset management:

(a) an immovable asset must be used efficiently and becomes surplus to a
user if it does not support its service delivery objectives at an efficient
level and if it cannot be upgraded to that level;

(b) to minimise the demand for immovable assets, alternative service
delivery methods that do not require immovable assets must be
identified and considered;

(i) a non-immovable asset solution is viable;

(ii) an immovable asset currently used by the state is adequate to
meet a change in its service delivery objectives; and

(Hi) the cost of the immovable asset as well as operational and
maintenance cost throughout its life cycle justifies its acquisition in
relation to the cost of the service;

(d) immovable assets that are currently used must be kept operational to
function in a manner that supports efficient service delivery;

(e) When an immovable asset is acquired or disposed of best value for
money must be realised. . ." (emphasis added)

8.4.3.2 The effect of GIAMA is, inter alia, to enforce optimal use of immovable
property. GIAMA, through section 21, creates a criminal offence should an
accounting officer wilfully or negligently contravene or fail to comply with any
provision of this Act.

8.4.3.3

This Act further provides that the DPW must annually prepare a custodian
asset management plan (C-AMP). A comprehensive C-AMP will include an

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acquisition plan, refurbishment plan, maintenance & repairs, and disposal
plan. In the interim, the needs for built environment, professional services,
construction, building and contracting services, land, buildings and facilities
will have to be estimated based on the annual budget and the business plan
of the units involved in the acquisition of construction related services.

8.4.4. The Requirements in Respect of the DPW Budget

8.4.4.1 The DPW business processes require of a client department, such as the
SAPS and the DOD, to confirm availability of funding prior to the procurement
process being embarked upon. Although the DPW is involved in the actual
acquisition and procurement of property and goods and services relating
thereto, the costs are to be borne by the client department.

8.4.4.2 The DPW, upon receiving a request to satisfy a need, embarks upon a
process of estimating the costs to the client department. This allows the client
department to assess its budget and to plan for the budgeting of the
expected expenditure.

8.4.4.3 As stated earlier, the National Treasury guidelines expect a need to be linked
to a budget and strategic objectives. Each department is expected to have a
strategic plan in place that identifies the aims of the department and provides
a budget towards achieving the said aims.

8.4.4.4 Regulation 5.1 of the Treasury Regulations makes it mandatory for the
accounting officer of an institution to prepare a strategic plan for the
forthcoming Medium Term Expenditure Framework (MTEF) cycle.

8.4.4.5 In terms of Regulation 5.2.2 the strategic plan must, inter alia, include details
of proposed acquisitions of fixed or movable capital assets, planned capital
investments and rehabilitation and maintenance of physical assets.

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8.4.4.6 The PFMA, together with the Treasury Regulations and guidelines, ensure
that proper planning is in place, a need is identified, analysed, and included
in the strategic planning and therefore budgeted for.

8.4.4.7 The Medium Term Expenditure Frame Work (MTEF) issued by the National
Treasury in 2007, which covers the period under review in this Report,
emphasises this point and the following is contained in the document -

"The link between strategic planning, budgeting and spending plans is
important in compiling a credible budget, as inadequate planning could lead
to budgets which do not give effect to strategic priorities".

8.4.4.8 Section 38(2) of the PFMA reinforces this principle of proper planning. This
section reads as follows:

"An accounting officer may not commit a department, trading entity or
constitutional institution to any liability for which money has not been
appropriated."

8.4.4.9 Expenditure must be in accordance with the vote of the department and the
main divisions within the vote. This requirement is encapsulated in section 39
of the PFMA. Read with section 38(2), the principle of proper planning is
once again highlighted.

8.4.4.10 The PFMA, however, recognises situations where a need is not linked to a
budget. In these instances four options are available to a department to fund
such needs.

8.4.4.11 The first option deals with a situation where no funding has been
appropriated, but due to an emergency, funds are required for the purposes
of procurement.

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8.4.4.12 Section 16 of the PFMA allows the Minister of Finance to authorise the use of
funds from the National Revenue Fund to defray expenditure provided that:

(a) the expenditure is of an exceptional nature;

(b) expenditure is not currently provided for; and

(c) the expenditure cannot be postponed to a future appropriation cycle
without serious prejudice to the public interest.

8.4.4.13 The second option is in the form of section 43 of the PFMA which allows an

accounting officer to utilise a saving in an amount appropriated under a main
division within a vote towards the defrayment of excess expenditure under
another main division within the same vote. This virement of funds is,
however, limited to 8% of the amount appropriated under that main division
and a report concerning the utilisation of the savings must be presented to
the Executive Authority (Minister) and the relevant treasury.

8.4.4.14 The third option open to departments is to request further funds from National
Treasury. This is, however, limited in its application and would only be
applicable to situations where:

8.4.4.15 The fourth option is to re-prioritise expenditure within a main division of a
vote to accommodate the need.

8.4.5. The Prescripts Relating to Urgency

(a) a department inherited new functions; or

(b) where due to policy decisions new needs arise.

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8.4.5.1 The PFMA and Treasury Regulations require that the default position in
regard to procurement is that a competitive bid procedure be embarked
upon.

8.4.5.2 However, the legislation recognises that in certain cases it is impractical to
invite competitive bids and as such it is permissible to procure goods or
services by other means, provided that reasons for the deviation are
recorded and approved by the accounting officer (Regulation 16A6.4).

8.4.5.3 The National Treasury issued Practice Note 8 of 2007/08 wherein, inter alia,
urgent, emergency or sole supplier cases were further regulated. Paragraph
3.4.3 thereof provides as follows:

"Should it be impractical to invite competitive bids for specific procurement
,e.g. in urgent or emergency cases or in case of a sole supplier, the
accounting officer / authority may procure the required goods or services by
other means, such as price quotations or negotiations in accordance with
Treasury Regulation 16A6.4. The reasons for deviating from inviting
competitive bids should be recorded and approved by the accounting officer/
authority or his/her delegate. Accounting officers/authorities are required to
report within ten (10) working days to the relevant treasury and the Auditor-
General all cases where goods and services above the value of R1 million
(VAT inclusive) were procured in terms of Treasury Regulation 16A6.4. The
report must include the description of the goods or services, the name/s of
the supplier/s, the amount/s involved and the reasons for dispensing with the
prescribed competitive bidding process."(emphasis added)

8.4.5.4 The SCM Guide at paragraph 4.7.5.1 notes that in urgent and emergency
cases, an institution may dispense with the competitive bidding process, but
must act in a manner that is in the best interest of the State.

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8.4.5.5 The SCM Guide defines an "emergency case" as -

"A case where immediate action is necessary in order to avoid a dangerous
or risky situation or misery." (emphasis added)

8.4.5.6 An "urgent case" is defined as "a case where early delivery is of critical

importance and the invitation of competitive bids is either impossible or
impractical". This definition is, however, subject to the qualification that "A
lack of proper planning should not be constituted as an urgent case. "
(emphasis added)

8.4.5.7 The following principles can be gleaned from this definition of urgency:

(a) The early delivery is the key requirement which would decide the
success or failure of the project;

(b) The time period available for the acquisition makes it impractical or
impossible to pursue a competitive bid process;

(d) For a situation to be classified as urgent all three the above
requirements must be met.

8.4.6. The Responsibilities of Accounting Officers in Respect of SCM

8.4.6.1 Section 38(1)(a)(iii) of the PFMA prescribes that the accounting officer of a

department must ensure and maintain an appropriate procurement and
provisioning system which is fair, equitable, transparent, competitive and cost
effective.

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8.4.6.2 In terms of section 38(1 )(c)(ii) of the PFMA, an accounting officer must take
effective and appropriate steps to prevent unauthorised, irregular and
fruitless and wasteful expenditure. It is expected of the accounting officer to
take effective and appropriate disciplinary steps against any official in the
service of the department who makes or permits an unauthorised, irregular
and fruitless and wasteful expenditure. Irregular, unauthorised or fruitless and
wasteful expenditure is regarded as an act of financial misconduct in terms of
section 38(1 )(h)(iii) of the PFMA.

8.4.6.3 An accounting officer is, in terms of section 86(1) of the PFMA guilty of an
offence and liable on conviction to a fine or to imprisonment for a period not
exceeding five years, if he or she wilfully or in a grossly negligent way fails to
comply with a provision of, inter alia, section 38, referred to above.

8.4.7. Assignment of Powers and Duties by Accounting Officers

8.4.7.1 In terms of section 44 of the PFMA, the accounting officer for a department
may in writing delegate any of the powers entrusted or delegated to him/her
to an official in that department.

8.4.7.2 However, in terms of section 44(2) (d) of the PFMA, a delegation to an official
does not divest the accounting officer of the responsibility concerning the
exercise of the delegated power or the performance of the assigned duty.

8.4.8. The Responsibilities of Other Officials

8.4.8.1 Section 45 of the PFMA provides that an official in a department must ensure
that the system of financial management and internal control established for
that department is carried out within the area of responsibility of that official.

8.4.8.2 Officials are also responsible for the effective, efficient, economical and
transparent use of financial and other resources within that official's area of

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8.4.9.
8.4.9.1

8.4.10.
8.4.10.1

8.4.10.2

8.4.10.3

responsibility. They must take effective and appropriate steps to prevent,
within his/her area of responsibility, any unauthorised, irregular and fruitless
and wasteful expenditure.

The Powers of the National Treasury

Section 6(2) of the PFMA provides that the National Treasury must intervene
by taking appropriate steps to address the serious material breach of the Act
by a department and may do anything further that is necessary to fulfil its
responsibilities effectively.

The SCM Policy of the DPW

The relevant SCM Policy (the Policy) of the DPW was approved by the
Director-General on 29 April 2008 and came into operation on 1 May 2008.

Paragraph 14 of the Policy provides that its purpose is to formalize the
DPW's SCM Policy within the context of the Treasury Regulations and that it
consists of the following three main components:

(a) Directives, providing specific direction on supply chain management
and key decision points;

(b) Delegations, assigning specific responsibilities to DPW role players, in
terms of section 38 of the PFMA; and

(c) Business processes, aligning the DPW's day-to-day procedures with the
overall requirements of the policy, directives and delegations.

The primary objective of the Policy, in terms of its paragraph 1 5, is to create
an environment that enables the DPW to manage the supply of goods,
services and works in a manner that is fair, equitable, transparent,

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competitive and cost effective. One of its focus areas in this regard is
demand management "to link SCM practices to the strategic planning and
budgeting processes and to improve strategies and planning for acquisition,
maintenance and disposal." Another is "introducing the concept of value for
money to balance socio-economic and black economic empowerment
objectives with the cost of the product and services, through appropriate
scoring models. "

8.4.10.4 Paragraph 18 provides for special measures to accommodate empowerment
initiatives as far as the construction industry is concerned. Potentially
emerging contractors will, in terms of paragraph 25 be invited to tender for
work in a category that is one higher than that in which they are graded by
the CIDB, provided that they are part of the DPW's contractor development
programmes.

8.4.10.5 The purpose of demand management is described in paragraph 37 of the
Policy as:

"...to ensure that resources to fulfill the needs identified in the strategic plan
are delivered at the correct price, time, place, quantity and quality to satisfy
the needs."

8.4.1 0.6 Paragraph 38 states that following in this regard:

"Proper demand management practices will allow the SCM unit to prepare
itself and the supplier base to meet the need for services by DPW.
Introducing demand management will require:

a. that a needs assessment is conducted prior to the beginning of the
MTEF period;

b. specifications are precisely determined; and

c. the supplier industry has been analysed. "

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8.4.10.7 The needs assessment process must, according to paragraph 41, "be
embedded in the business planning and budgeting processes as part of the
annual budgeting and business plan cycle." As far as immovable assets are
concerned, it is provided that:

"In terms of the Government Immovable Asset Management Act, (GIAMA),
DPW must annually prepare a custodian asset management plan. "

8.4.10.8 The DPW must, in terms of paragraph 47 of the Policy, have a register of
suppliers. This register is regarded as a key instrument to ensure that the
DPW has sufficient appropriately qualified suppliers to provide the
department with goods or to perform required services. The stated objectives
of the Supplier Register are, inter alia, to

"assess the profile of suppliers available in the market;

maintain an approved list of suppliers to aid the quotation method of
acquisition;

reduce the administrative and bidding/quotation costs for both the
Department and the supplier. "

8.4.10.9 The accounting officer of the DPW must, in terms of paragraph 60 of the
Policy, ensure that appropriate delegations are in place for acquisitions in line
with the Treasury Regulations and prescripts.

8.4.10.10 The Chief Director: Supply Chain Management of the DPW issued a
"DIRECTIVE: ACQUISITION AND DISPOSAL MANAGEMENT" in terms of
the Policy, on 19 February 2010. The following acquisition procedures to
acquire goods and services provided for under paragraph 18 of the Directive
are of significance to the project referred to in this report:

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idard application for goods and servii
lND for engineering and construction

Open
Procedure

All bids above the value threshold must be solicited
through the Open Procedure.

Vendors may submit bid offers in response to an
invitation by the Department to do so.

The Open Procedure must be used for ad hoc contracts
above the value threshold, to award term contracts and
to establish a panel of preferred service providers.

Above R500 000

The Negotiated Procedure is the least desirable of all
acquisition procedures and Bid Adjudication
Committees may approve this procedure as a last
resort

Bids or quotations are solicited from a single vendor.
The negotiated procedure may be used in the following
circumstances only:

Negotiated
Procedure

If the goods or services must be acquired as a matter of
urgency or emergency and a competitive bidding
process or other acquisition procedures are impractical,
provided that the circumstances giving rise to the
urgency were neither foreseeable by the users nor the
result of dilatory conduct on their part;

Owing to a catastrophic event there is an urgent need

for the goods, works or services, making it impractical

to use other methods of procurement because of the

time involved in using those methods;

If the market was tested and no responsive bids were

obtained;

If there is no competition and only one vendor exists.

Any value

The reason for using the negotiated procedure must be
motivated in the sourcing strategy for approval by the
BAC.

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PROCEDURE

STANDARD APPLICATION FOR GOODS AND SERVICES
AND FOR ENGINEERING AND CONSTRUCTION

Nominated
Procedure

The Nominated Procedure is not a desirable
acquisition procedure and the relevant BAC may
approve this procedure as a last resort

At least three vendors are nominated from the supplier
register or panel of vendors to provide a written or
verbal quote.

This procedure must be motivated to the BAC.

The Nominated Procedure may be used:

• In emergency cases; or

• Where there are time constraints in carrying out the
service;

• For the supplying of the goods or where the services
required are of a specialized nature

Figure 16: Acquisition Procedures in terms of DPW policy

8.4.10.11 Paragraph 23 of the Directive relates to Ad hoc contracts and provides as
follows:

"Ad hoc contracts will be utilized as follows:

a. Goods or services that are required infrequently, or on a once off basis,
or where there are no term contractors or panels in place for the
required goods or services, will be acquired on an ad hoc basis, either
through the open bid procedure or the quotation procedure;

b. Vendors will enter into a contract with the Department to render
services on a once off basis;

c. Ad hoc contracts will be entered into for a contract that has a definite
scope of work, timeframe and price (as submitted by the vendor)."

8.4.10.12 Variation orders are provided for in paragraphs 29 to 33 of the Directive.

According to these provisions contract variations refer to any change in the
scope of work, specifications or time which was not provided for in the
original contract. Variation orders must be recorded in writing. Project

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managers are required to confirm the availability of funds before obtaining
approval of any variation order.

8.4.10.13 "Emergency and/or urgent acquisitions" are provided for as follows in
paragraphs 44 to 50 of the Directive:

"44. A lack of proper planning does not constitute an urgent or emergency
case.

45. Under the following circumstances, the Department may dispense with
the invitation of bids and may obtain the required goods, works or
services by means of quotations or in any other manner that is
determined to be in the best interest of the State:

a. urgent circumstances; or

b. emergency circumstances.

46. Goods or services may be acquired in an urgent or emergency situation
using the following standard acquisition procedures:

a. Nominated Procedure;

b. Quotation Procedure;

c. Negotiated Procedure.

47. All urgent and emergency acquisitions for goods and services will be
approved verbally by the relevant Regional Manager and in the case of
Head Office the Chief Director: SCM.

48. For works related acquisitions the Project Manager will record the
reasons and justification for the urgent and/or emergency related
acquisitions.

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49. On completion of the emergency or urgent acquisition, a fully motivated
report must immediately be forwarded to the BAC for merit assessment
and ratification.

50. Negligence on the part of officials in obtaining the necessary approvals
will be dealt with in terms of the Department's internal disciplinary
proceedings. "

8.4.10.14 The functioning of the BAC is provided for in paragraph 216 of the Directive
in terms of which it conducts, inter alia, the following specific tasks in the
acquisition process:

(a) Approval of sourcing strategy. In this regard it is expected of the BAC to
consider the strategy that will ensure that the most favourable
acquisition process is followed;

(b) Assessment and award of bids recommended by the BEC;

(d) Approval of urgent and emergency acquisitions; and

(e) Awarding of contacts;

(f) Approval of variation orders. Paragraph 223 provides in this respect

"The BAC must ensure that the variation order does not exceed the
scope of work to the extent where the variation order could be
perceived as a new contract, or which could have the potential to have
prejudiced other vendors by not being included in the original scope of
work. "

that:

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8.4.10.15 In terms of paragraph 190 of the Directive, the BAC operates under
delegations as approved by the Accounting Officer of the DPW.

8.4.10.16 Annexure C to the Directive deals specifically with the acquisition of
professional service providers in the built environment. It provides for only
two acquisition procedures, namely quotations in respect of projects with a
percentage or time based fee value not exceeding R500 000, and Open
Tender.

8.4.10.17 It must be noted that in terms of the DPW's SCM Circular of 2009/10, issued
on 25 May 2009, a Special National Bid Adjudication Committee (SNBAC)
was appointed for acquisitions exceeding R20 million.

8.4.11. The Role of the DPW Regional Offices in the SCM process in Respect of the
Procurement of Goods and Services

8.4.11.1 It was established through the course of the investigation that under normal
circumstances the client department submits a needs analysis and funding
confirmation to the Key Accounts Management (KAM) division located at the
Head Office of the DPW.

8.4.11.2 The KAM division then fully assesses the client's need, including the nature
and extent of the goods and services required.

8.4.1 1 .3 When satisfied that the relevant requirements are met the KAM division then
issues a Procurement Instruction (PI) to the DPW Regional Office in whose
area the goods and services are to be procured.

8.4.11.4 The PI requires of the Regional Office to follow the SCM principles,
procedures and processes in the procurement of the goods and services to
the satisfaction of the client department, in terms of the approved norms and
cost.

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8.4.11.5 If the cost exceeds R20 million a recommendation relating to an appropriate
procurement strategy must be submitted to the (Special National Bid
Adjudication Committee (SNBAC) for approval.

8.4.11.6 Once approved by the SNBAC, the procurement strategy must be
implemented by the Regional Office.

8.4.11.7 The Regional Office then becomes responsible for the initiation of the
procurement process in compliance with the approved procurement strategy.

8.4.11.8 The Regional Office is required to provide regular feedback to the KAM
division of the progress made throughout the procurement process.

8.4.12. The Delegations to the Project Manager and Other Officials of the DPW

8.4.12.1 On 3 October 2005, the Director-General of the DPW issued delegations to
officials of the Department, in terms of the provisions of the PFMA, in a
document entitled "DELEGATION OF POWERS, DUTIES AND FUNCTIONS
WITH REGARD TO THE MANAGEMENT OF SITE CLEARANCE-
,BUILDING-,LEASING-OR ENGINEERING PROJECTS, VESTED IN THE
DIRECTOR-GENERAL BY VIRTUE OF HIS ROLE AS D I ECTOR -
GENERAL/ACCOUNTING OFFICER OF THE DEPARTMENT OF PUBLIC
WORKS."

8.4.12.2 Mr Rindel indicated during the investigation that the delegations referred to in
this document still applied at the time of its implementation.

8.4.12.3 The Introduction to the delegation document states that delegations apply to
posts and therefore to any person formally appointed to that post. It is further
required of the officials affected by the delegations to be conversant with the
relevant legal and policy frameworks that apply to their functions. The

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document further provides that the delegations empowered managers to take
decisions for which they would be held accountable and that:

"Although duties have been delegated to the official, the Accounting Officer is
still held accountable together with the person who has been delegated."

8.4.1 2.4 A Project Manager is defined by the delegation document as:

"An official appointed in terms of these delegations to manage a site
clearance-, building, leasing-or engineering project on behalf of the Director-
General and shall deem to include all professional staff members of the Chief
Directorate: Professional Services tasked with projects, related to the built
environment, aimed at compiling policy documents, norms, standards, pro-
forma documentation, manuals and all other related assignments, including
the management of Consultant appointments to achieve the desired end
products(s)." (emphasis added)

8.4.12.5 In terms of paragraph 1.6 of the delegation document, the approval to
improve privately owned land can be granted at the level of a Deputy
Director-General. However, it has to be based on an accepted feasibility
study and recommendation by the relevant Chief Director: Key Account
Management and the Chief Director: Professional Services.

8.4.12.6 The acceptance of a Procurement Instruction was delegated to a number of
officials at Director Level on condition that the Procurement Instruction must
be complete in all respects, including funds allocation, preliminary
programme, cash flow/budget particulars and registration on the WCS.

8.4.12.7 Paragraph 4.1 delegated the approval and amendment of sketch plans in the
case of a building project to the Directors: Projects and Maintenance,
Professional Services, Project Management Support, Special Projects and
the Transaction Manager. The approval was subject to the recommendation

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of the Project Manager and the following general notes and conditions
applied:

"1. Sketch plans and/or preliminary design reports of all projects consisting
of:

(a) new work;

(b) upgrading or alterations to existing buildings/installations/
engineering infrastructure or

must be subjected to the scrutiny and comment of the Scrutiny Com at
Regional Level for projects with an estimated value of less than R10M
and to the Scrutiny Com at Head Office level for projects with an
estimated value of more than R10M.

2. If serious or far reaching comments were passed by the Scrutiny Com,
and the Professional Team was required to re-submit an
amended/revised design, such amended/revised design must first be
completed before final approval stages, referred to below, can be
considered. PM (Project Manager) to consider a further round at the
Scrutiny Com.

3. The final approval power (delegated power as above) must only be
executed subject to the comments by the Scrutiny Com, design
documents being in compliance with the prescribed space norms and
cost limits, funds being available and the Client Department having
expressed its satisfaction and granted written approval on the
drawings/report.

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4. Approvals given against advise (sic) of Professional Services/Scrutiny
Committee will be at the risk of the approving authority in terms of this
delegated power.

5. The amendments must not be of such extensive nature that it
constitutes a new project or new design and may not exceed 5% of the
project estimate. PM to supply full motivation as to the necessity for the
amendment. Amendments may not violate space norms and cost limit
set for the project. If the 5% margin stated herein is exceeded, the
comments of the Scrutiny Com are to be obtained again. "

8.4.12.8 The Scrutiny Committee referred to above is defined by the delegation

document as:

"A Committee at Head Office or Regional Office level, comprising of one
member of each of the built environment professional sections in the Unit:
Professional Services, chaired by the member of Architectural Services in the
case of a building project or a member of the relevant Engineering profession
in the case of an engineering project. The D/TP Services (Director: Town
Planning Services) to form part of the said Committee to verify if the
proposed development is in line with Site Development Plans and/or
development conditions as negotiated during site creation. "

8.5.1. Section 237 of the Constitution which provides that "all constitutional

obligations must be performed diligently and without delay" is considered
relevant in guiding the use of limited state resources. Principles of Public
Administration referred to in section 195 was also considered relevant.
Section 195(1 )(b) provides for "efficient, economic and effective use of
resources to be promoted. " .

8.5.

Other rules and policies

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8.5.2.
9.

9.1.

9.1.1.

9.1.1.1

9.1.1.2

9.1.1.3

As one of the principles of public administration, the Batho Pele White Paper
Transforming the Public Service Delivery was also considered. Key in this
policy paper is the principle of putting, first in the context of transforming the
Public Service, towards one that is people centred.

ANALYSIS AND CONCLUSION

The Legal Authority For The State To Provide Adequate Security At The
Private Residence Of The President And The Compliance With The
Prescribed Processes

The Cabinet Policy: Security Measures at the Private residences of the
President, Deputy President and former Presidents and Deputy Presidents

The Ministerial Handbook does not apply to the provisioning of security
measures by the state in respect of the private residence of the President.

The President and Deputy President have a special security regime created
by the Cabinet Policy: Security Measures at the Private residences of the
President, Deputy President and former Presidents and Deputy Presidents,
dated 20 August 2003.

The key requirements prescribed by the Cabinet Policy which have to be
complied with before the DPW commences with the installation of security
measures at a President's private residence are set out in the table below:

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• A REQUEST BY THE PRESIDENT OR PRESIDENCY

• JOINT SECURITY EVALUATION OF PRIVATE RESIDENCE BY SAPS
ANDNIA

• JOINT PROPOSAL ON SECURITY MEASURES SUBMITTED TO
INTER-DEPARTMENTAL SECURITY COORDINATING COMMITTEE
FOR TECHNICAL ASSESSMENT

DPW PREPARE COST ESTIMATES OF PROPOSED STRUCTURAL
SECURITY MEASURES AND SUBMIT TO SAPS

• SAPS ADVISE MINISTER OF POLICE ON PROPOSED SECURITY
MEASURES AND THE COST

MINISTER OF POLICE COMMUNICATES APPROVED MEASURES
TO THE PRESIDENT FOR HIS/HER CONSENT

• SAPS SUBMITS MEASURES AS APPROVED BY THE PRESIDENT TO
THE MINISTER OF PUBLIC WORKS FOR APPROVAL OF
STRUCTURAL COMPONENTS

• SECURITY MEASURES AGREED TO IMPLEMENTED

Figure 1 7: Key Requirements as prescribed by the Cabinet Policy

9.1.1.4 It should be noted that the Cabinet Policy provides that the security
measures agreed to have to be implemented as follows:

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(a) SAPS personnel and related costs have to be provided and funded by
the SAPS;

(b) Structural additions and amendments have to be provided, maintained
and funded by the DPW.

9.1.1.5 None of these requirements of the Cabinet Policy were complied with in
respect of the Nkandla Project, but for the two security evaluations that were
conducted by the SAPS. However, there was no indication in the evidence of
Brigadier Adendorff that the evaluations were conducted jointly with NIA
(SSA) or that it was submitted to the Inter Departmental Security
Coordinating Committee for technical assessment.

9.1.1.6 Brigadier Adendorff stated that she was not aware of the existence of the
Policy, and therefore the Minister of Police was never advised accordingly.
Mr Rindel was also not aware that the Nkandla Project was based on the
Policy.

9.1.1.7 From the investigation it was evident that the SAPS officials involved just
accepted that they had to present security evaluations to the DPW and be
involved in the Nkandla project, without having a clear understanding of the
relevant and applicable regulatory prescripts and requirements. They took no
interest in the extent and outrageous escalation of the cost of the Nkandla
Project, as they regarded it as DPW's problem despite the fact that large
parts thereof related to their areas of responsibility, as contemplated by
section 45 of the PFMA.

9.1.1.8 The Minister of Police probably did not inform the President and requested
his consent, as he was required to have done in terms of the Policy, because
he was not advised accordingly by the SAPS.

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9.1.1.9 The Policy further provided that the security measures that relate to the
personnel of the SAPS had to be funded by it. However, in this case all the
costs were carried by the DPW.

9.1 .1.10 I could find no indication that the DPW's accounting officer or the officials to
whom he delegated responsibility for the implementation of the Nkandla
Project ever enquired into the legal and policy framework in respect of the
provision of security measures at the President's private residence. The
Policy was already adopted by the Cabinet in 2003, i.e. 6 years before Mr
Zuma became the President, and therefore clearly applied in respect of the
security measures that were installed at the private residences of former
Presidents Mandela and Mbeki. It is therefore highly unlikely that senior
officials involved in those projects were not aware of it.

9.1.1.11 Some of the officials involved in the Nkandla Project were mistakenly under
the impression that the provisions of the Ministerial Handbook applied in this
case.

9.1 .1 .12 The failure by the DPW and the SAPS to ensure compliance with the Policy
was probably also the result of the absence of a DPW policy framework
regulating the installation of security measures at the private residences of
the President, Deputy President and former Presidents and Deputy
Presidents.

9.1 .1.13 The result of the failure on the part of the DPW and the SAPS to comply with
the provisions of the Policy was that neither the Minister of Police nor the
President was accordingly advised of the proposed measures and the cost
thereof. It further resulted in the DPW funding the total bill in the absence of
an authorizing instrument, which was irregular.

9.1.1.14 The non-compliance of the SAPS and DPW with the Cabinet Policy was
improper and constitutes maladministration.

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9.1 .2. The National Key Points Act

9.1.2.1 The President's private residence was declared a National Key Point by the

Minister of Police, in terms of section 2(1) the National Key Points Act, 1980,
on 8 April 2010. In the Declaration Certificate the Minister of Police directed
the President to pay for all security upgrades at his homestead, which now
constitutes a National Key Point.

9.1 .2.2 The Minister of Police personally signed the Declaration Certificate. I
therefore have to accept that he was aware of the provisions of the National
Key Points Act at the time.

9.1 .2.3 The President's private residence was only declared a National Key Point 1 1

months after he was appointed. By that time the Nkandla Project was already
underway. It was not explained during the investigation why this was not
done when the project commenced in May 2009 and was regarded as
urgent.

9.1 .2.4 As indicated above, the Cabinet Policy was not complied with and therefore

did not constitute legal authority for the expenditure incurred by the DPW in
respect of the Nkandla Project. The declaration of the President's private
residence as a National Key Point on 8 April 2010 therefore had the result
that as from that date, he was required to secure his private residence at his
own cost. His failure to do so without reasonable cause would have
constituted a criminal offence.

9.1 .2.5 It is common cause that the President did not implement any security
measures in respect of his private residence, as was required of him in terms
of section 3 of this Act.

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9.1 .2.6 There is no evidence that the Minister of Police issued a notice in terms of
section 3(2) of this Act ordering the President to within a specified period and
at his own expense takes steps to secure the premises.

9.1 .2.7 The Minister of Police could, in terms of section 3A of the National Key Points
Act, only have taken over the duties of the President to secure his residence
as a National Key Point, on his behalf and with his consent. In such a case,
the President was liable for the cost of the steps taken, to the extent
determined by the Minister.

9.1 .2.8 I requested the Minister of Police on several occasions during the
investigation to submit the relevant documents and/or correspondence
indicating that the President was informed of the actions taken by the
Minister as far as securing his private residence was concerned, that he
consented to it, that a decision was taken accordingly and that he was
informed of his liability for the costs involved.

9.1.2.9 No such documents and/or correspondence could be provided and I could
find no evidence or indication that the Minister invoked the provisions of
section 3A of the National Key Points Act at any time.

9.1 .2.10 When I raised my views on the evidence pointing at non-compliance with the
provisions of the Cabinet Policy of 2003 and the National Key Points Act with
the Minister of Police during the investigation, he contended that:

"There is no provisions in the NKP (National Key Points) Act which requires
the President as the owner of the Key Point to pay for the security measures
that are implemented at the Key Point if the security measures (security
upgrades) are implemented to provide for his own security as a President
and not the security of the Key Point. The only instance the President as the
owner of the Key Point would be required to pay for the security measures

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implemented at the Key Point is when such security measures are
implemented in order to protect the Key Point and not the President.

9.1.2.11 I found the reasoning of the Minister difficult to follow as the purpose of the
National Key Point Act is the safeguarding of a "place" and not a person.

9.1 .2.1 2 The Minister correctly contended that:

" What is patently clear from the reading of Sections 2 and 3 of the NKP Act is
that the security that is required to be implemented by the owner of the Key
Point at his cost or expense is the security of the Key Point and not the
security or safety of the owner. "

9.1.2.13 This in my view clearly means that once the Minister had decided that the
"place" i.e. the President's private residence had to be declared a National
Key Point, the focus was on safeguarding it and not the President. It was the
Minister himself that informed the President in the Declaration Certificate that
he had to take the safeguarding measures at his private residence at his own
cost. The anomaly in this regard is that the President's private residence was
obviously only regarded as a National Key Point, due to the fact he it is his
home. If anyone else was living there, it would not have been so declared. It
is therefore clearly different from an airport or military installation that would
remain a National Key Point, irrespective of its occupants.

9.1 .2.14 The Minister maintained that the security measures were implemented by the
DPW at the President's private residence in terms of the Cabinet Policy of
2003. He stated further that:

It is illogical to suggest that the State's obligation to implement security
measures ceased to exist the moment his private residence was declared a
Key Point. The State's obligation to implement security measures at the
President's private residence continued beyond its declaration as a Key Point

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on 8 April 2010 because the Cabinet Policy of 2003 enjoins the State to
provide for the President's safety at his private residence by implementing
security upgrades at his private residence. For the above reasons there
would have been no legal basis for me as the Minister to have required the
President to pay for the security upgrades post 8 April 2010 as required by
Section 3(1) of the NKP Act for the simple reason that Section 3(1) of the
NKP Act does not apply to the security upgrades that were initiated and
implemented in (sic) the President's private residence. "

9.1 .2.15 The difficulty I have with the Minister's view is that the Cabinet Policy was not
complied with. The measures implemented up to 7 April 2010 were therefore
not based on compliance with the relevant instrument. The Minister's
submissions further fail to accept that it was he who ordered the President to
pay under the National Key Points Act.

9.1.2.16 In his submissions in this regard, the President stated that the security
measures implemented at his private residence should not be "measured
against the prescripts of the National Key Points Act. "

9.1 .2.17 The President contended in this regard that:

"A national key point does not out of necessity imply that security features
must be present;

The regulatory framework of the National Key Points Act relates to the
security of the place ;

security features are assessed and evaluated with specific regard being had
to the person , in this instance my position as President of the Republic of
South Africa;

security measures may be implemented without the declaration of a National
Key Point and vice versa;

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any discussion regarding a contribution by me to the costs of the key point in
terms of section 3 relate to the security of the place and not its construction. "

9.1.2.18 As already indicated, I agree with the contention that the purpose of the
National Key Points Act is the safeguarding of a place and not a person.

9.1.2.19 During their presentation on his submissions, the President's legal team

submitted that a place can be safeguarded without security measures and
that the security of a place such as the President's private residence does
not have to involve construction. I found this argument difficult to accept as I
could not envisage the safeguarding of a private residence without any
security measure, even if it only a palisade fence, that would not involve
construction.

9.1 .2.20 The legal position in my view is therefore that the National Key Points Act

was not complied with. The other authorising instrument, being the Cabinet
Policy of 2003 was not fully complied with as the prescribed procedures were
not adhered to and the boundaries thereof exceeded.

9.1 .2.21 The expenditure incurred by the DPW in respect of the Nkandla Project was
accordingly irregular.

9.1.2.22 The failure by the Acting Directors-General of the DPW, to ensure that the

expenditure incurred by the DPW in respect of the Nkandla Project was
based on a valid authorizing instrument constituted a violation of the
provisions of section 38 of the PFMA, was improper and amounts to
maladministration.

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9.1 .3. The South African Defence Review

9.1.3.1 The South African Defence Review was issued in 1998, by virtue of the
White Paper on National Defence for the Republic of South Africa, which
constitutes the National Defence Policy.

9.1 .3.2 Chapter 7 of the Defence Review provided for the non-military tasks to be
performed by the South African National Defence Force (SANDF).

9.1 .3.3 In terms of paragraph 9 of this Chapter, the SANDF provides VIP air
transport for the President, the Deputy President, the Minister and Deputy
Minister of Defence and, where capacity allows, for other Cabinet Ministers
and Premiers.

9.1 .3.4 Paragraph 22 provides that:

9.1 .3.5 It has already been indicated that no specific documents were provided that
expressly authorize the building of a clinic. Another regulatory instrument
cited was the Military Doctrines authorising SAMHS to provide medical
assistance, including specialised health facilities to government departments
on request. It did not seem to make sense that the President's private
household would be classified under government departments. Lt Gen
Ramlakan conceded that much of the ground traversed in Nkandla had no
previous trail from its own activities in relation to predecessors. A mobile
clinic given to former President Mandela in the last years of his life was the
closest precedent. Then there was an airport said to have been built a stone
throw away from former President Botha's house in George, which turned out

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to be a public airport built 23 km from private residence at Wilderness. In fact,
this provided precedence of the approach that keeps the people first while
meeting the unprecedented needs of an important dignitary such as the first
citizen.

other items constructed during the project and the excessive
expenditure incurred

9.2.1. As I have indicated above, it was alleged and/or suggested by some of the

complainants that the Nkandla Project went beyond addressing the security
elements that are necessary for the protection of the President and that it
constituted an improper improvement and extension of his private residence.

9.2.2. It is not disputed that the security at the President's private residence had to
be improved when he took office in May 2009.

9.2.3. The SAPS, DOD and DPW were responsible for the implementation of the
Nkandla Project and the SAPS and the DOD had to carry most of the cost, as
the client departments.

9.2.4. In the absence of a clear DPW policy on the implementation of security

measures at the private residence of the President, the details and extent of
the Nkandla Project were to be informed by the requirements itemised in the
security evaluations. The DOD part needed to be based on precedent and
where none existed a request for a higher authorisation from a higher
authority, such as Cabinet, should have been considered.

9.2.5. It must be understood that the legal and policy framework regulating security
measures at the President's private residence do not allow for discretionary
decisions regarding additional measures that could be taken. As far as such

9.2.

The relevance to security of the measures installed and buildings and

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discretion was to be exercised, it should in any event have been exercised
reasonably.

9.2.6. There is a clear mismatch between some of the "big" items in the list and the
lists in the Minimum Physical Security Standards instrument, and the list
prepared by the security experts. The table below shows this discrepancy.

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MEASURES AUTHORISED BY PRESCRIPTS

PRESCRIPTS BUT
ECOMMENDED BY SECU
VALUATIONS OR INCIDEf

EASURES NEITHER AUTHORISED BY
tECRIPTS NOR RECOMMENDED BY
SECURITY EVALUATIONS OR
INCIDENTAL THERETO

Safe haven Secure room on the surface that could not be reached
or surveyed from outside the residence. Should consist of
enforced brick walls and ceiling, bullet resistant windows and a
bullet resistant door

Safe haven facility underground with
air-conditioning and lifts

CCTV Security System

Intruder alarm system

Solid walls and bullet resistant glass in certain rooms

Bullet Resistant Glazing installed
in all the areas regarded as
sensitive

Bullet resistant glass installed in the
President's houses and all buildings that
he regularly use

Security doors in certain rooms

Burglar proofing of certain rooms

All windows to be fitted with
burglar proofing secured to the
walls

A new secured and security equipped guard hut to be built at the
new main gate

2 Additional guards huts

Brick and Mortar Perimeter fence

External and internal perimeter fence around the entire
homestead

High security parameter fence

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MEASURES AUTHORISED BY PRESCRIPTS

MEASU ltc?J 1 o T U c T R H M T R ' SED BY MEASURES NEITHER AUTHORISED BY
PRE^CRIPT^ RUT

nr^^r-^rr, „w f rn ,„,™ PRECRIPTS NOR RECOMMENDED BY

ZTr l SECURITY EVALUATIONS OR
EVALUATIONS OR INCIDENTAL INCIDENTAL THERETO

Fire-fighting equipment in certain rooms Fire detection system
linked to the Control Room and proper fire-fighting equipment in

iij.1 i *ii* r ■ i I-. >i ■

all the buildings of the President

Fire extinguishers and fire
hydrants

A fire-pool converted into a swimming
pool

Illumination of the residential area

Security gate at the main entrance

Security control room

Secure garage parking

Living quarters for SAPS staff with parking facilities

20 thatched roof buildings with a
laundry facility, paved roads,
landscaping constituting a small
residential village

A new borehole to be sunk to improve the water supply to the
premises, alternatively, a mini sewer treatment plant to be built

Steel water reservoir and mini
sewer treatment plant

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MEASURES AUTHORISED BY PRESCRIPTS

PRESCRIPTS BUT
ECOMMENDED BY SECU
VALUATIONS OR INCIDEf

EASURES NEITHER AUTHORISED BY
tECRIPTS NOR RECOMMENDED BY
SECURITY EVALUATIONS OR

Turk chnn inQiHp thp rpQirlpnti^il arpa tn hp rplnr^ttprl

1 ULI\ Jl 1U[J 1 1 1 O 1 U C L 1 IC 1 CjIUCI 1 Ud 1 d 1 Cd LU UC 1 ClUtaLCU

Tuck shop relocated

Standby generator for uninterrupted power supply to security

bybLclllb

Standby generator for
uninterrupted power supply to
security systems

Health care facility

■ I 1 ! 1 !. 1 • • • ■ ■ r ■

Military clinic consisting of a permanent
structure furnished with specialized
equipment and facilities for the
exclusive use of the President, his family
and staff.

Helicopter landing pads

Temporary accommodation for SAPS and DOD staff
Park Homes

Construction of a new kraal and
installation of culvert with remote
controlled gate

Amphitheater and area for marquee
tent

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scum mi men

MEASURES NOT AUTHORISED BY
PRESCRIPTS BUT
RECOMMENDED BY SECURITY
EVALUATIONS OR INCIDENTAL

MEASURES AUTHORISED BY PRESCRIPTS

IASURES NEITHER AUTHORISED BY
iECRIPTS NOR RECOMMENDED BY
SECURITY EVALUATIONS OR
INCIDENTAL THERETO

Relocation of 4 households

Patrol roads between fences

Elaborate paved roads, terraces and
walkways

Visitors Lounge

Landscaping necessary to

Other landscaping

rehabilitate land and address

storm water

Figure 18: Breakdown of Authorised, Unauthorised and Non-Security Related Measures Implemented in the Nkandla Project

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9.2.7. The Minister of Police suggested during the investigation that one would

require the opinion of a security expert to determine whether the measures
that were implemented by the DPW went beyond what was required for the
security of the President.

9.2.8. There is no evidence indicating that Mr Makhanya had any experience in the

design of security related projects. The argument presented that being an
architect qualifies him to design security installations has the same
implication as arguing that just because I am a lawyer I am an expert at any
area of the law. That cannot be logical.

9.2.9. Regarding how I was to determine legitimate installations in the name of

security I agree with the concession made by the President's legal team in its
submissions that the determination of what constituted security provisions for
the President had to be made on the list contained in the two SAPS Security
Evaluation Reports. There is no evidence that any of the security measures
that are not referred to in these reports and that were installed in addition
thereto were based a proper security evaluation. The evidence, as alluded to
earlier, shows on-going casual discussions and measures implemented on
an impromptu idea, with most of these ideas coming from Mr Makhanya.

9.2.1 0. The excessive expenditure incurred by the state was the result of a failure on

the part of the SAPS and DPW officials responsible for the implementation of
the Nkandla Project to guard against expenditure that was not authorised or
necessary for the security of the President and, to focus on what was
reasonably affordable. Whatever the discretionary powers that were
exercised in this regard, such powers were clearly not applied within reason.
I noted that the escalation in the estimated cost of the Nkandla Project from
approximately R27 million to approximately R225 million was also the result
of additions that were not recommended or requested by security experts.

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9.2.1 1 . I also noted that the National Key Points Act, which one of the instruments is

relied upon in terms of which the Nkandla Project was implemented, provides
for security measures to be taken at the expense of the owner of the National
Key Point, in this case the President. This, in my view, is indicative of the fact
that the Legislature regarded the measures that have to be taken to be
reasonable and affordable to the owner of the National Key Point. This
principle was clearly not applied by the DPW, SAPS and DOD in the
implementation of the Nkandla Project.

9.2.12. One of the other reasons for the excessive expenditure, which resulted in a

misappropriation of public funds, was that Mr Malebye, the Acting Director-
General of the DPW delegated, against the law, unconditional and unlimited
authority for the procurement of goods and services to the Regional Office in
respect of the Nkandla Project.

9.2.13. Mr Makhanya also indicated that the Project Team did not have the luxury to
plan in advance but that planning took place while the works were being
implemented.

9.2.14. The extent of the difference between the expenditure incurred by the state in

respect of the security measures installed at the private residences of former
Presidents Botha, De Klerk, Mandela and Mbeki and incurred at President
Zuma's private residence is an indication that the enabling policy framework
anticipated something more modest. This is so even if we take into account
the location and remoteness of the area of Nkandla, as is indicated in the
table below:

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R 250,000,000

R 241 000 000.00

R 200,000,000

R 150,000,000

R 100,000,000

R 50,000,000

R 173 338.32

(R20 101.67)

R 236 484.78

(R42 196.19)

R 32 000 000.00 R 12 483 938.17

(R 8 113 703.24)

& m

Botha De Klerk Mandela Mbeki

□ (Actual Value) □ Estimated 2013 Value

Zuma

Figure 19: Comparative Expenditure on Security Related Upgrades

9.2.1 5. Lt Gen Ramlakan referred to the fact that the DOD had placed a field hospital
at former President Mandela's rural home, the replacement costs of which
amounts to more than R17 million. However, this is a mobile facility that can
in the future be utilized elsewhere and is not a permanent fixture, as is the
case of the military clinic that was constructed at the Presidents private
residence at a cost of R1 1 million.

9.2.16. The table below indicates the measures that were installed by the state as
part of the Nkandla Project that constitutes an improvement of the
President's private residence in comparison with the measures that constitute
state facilities:

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JCjLIC F>EO>TE<:.TOk
SOUTH flft'lOl

MEASURES INSTALLED THAT FORM PART
OF OR ARE DIRECTLY LINKED TO THE
PRESIDENTS PRIVATE RESIDENCE AND

iTiVli jHMl^kirilll jili!riiljill*«li 1 m I >J 4*J mil]

SIDENTS PRIVATE RESIDENCE AND FORM PART OF
STATE FACILITIE

Security systems installed in all the
Presidents houses and other buildings

Military Clinic

Security fence and patrol roads around the
Presidents private residence

Security fence and patrol roads outside of the President's
private residence and around buildings and facilities of
the state

Visitors' Centre

Security Control Room

Swimming Pool

Helipads

Amphitheatre

Crew Pavilion

Grassed area for Marquee Tent

Staff accommodation and parking facilities

Paved areas around the swimming pool,
Visitors Centre and amphitheatre and paved
walkways

Park Homes

Safe Haven

Guard house and entrance gate at main entrance

New houses for relocated households

Landscaping of the terrain occupied by the state

Emergency electricity facilities

SAPS Garage

New kraal and culvert

Transformer & LV Room and refuse area

New Tuck Shop

Steel water reservoir and mini sewer
treatment plant

lumination around the residence

Fire detection systems

Bullet resistant glazing

Security doors in certain rooms of buildings
of the President

Burglar proofing of all buildings of the
President

Landscaping of the terrain of the President's
residence

Air conditioning of President's houses

Figure 20: Comparison between Private Residence and State Facilities Upgrades

9.2.17. There is no question that the President's private residence was substantially
increased due to some of the measures taken by the state. Clearly, items
such as the Visitors Centre, swimming pool and terrace, amphitheatre,
elaborate paved roads, terraces and walkways and the building of the kraal,

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with an aesthetically pleasing structure, a culvert with a remote controlled
gate and chicken run, added substantial value to the property.

9.2.18. The excessive nature in which the Nkandla Project was implemented went a

long way to beautify the President's private residence and to add comfort to
its infrastructure, which was not the objective of security measures that had
to be implemented for his protection.

9.2.19. If one takes into account the condition and extent of the President's private

residence when the Nkandla Project started and compares it with its current
stature, it is obvious that the state has made a major contribution to the
President's estate at the expense of the taxpayer.

9.2.20. The relocation of neighbours households, at the substantial cost to the state
of approximately R8 million has no legal basis apart from the issue of legality,
no sensible and affordable alternative was considered.

9.2.21 . Regarding the outside installations, it is clear that there is a legal and policy

lacuna or gap. The first gap relates to whether these installations can be
implemented at or near a private person's household when the person at the
time is a president or another qualifying dignitary. The law advanced does
not seem to support Lt Gen Ramlakan. The second gap refers to what
exactly can be implemented as privileges for a public office bearer. Should
such bulk facilities be directed at a deserving dignitary and his or her family
or placed in the community for collective benefit, in a manner that gives
convenient access to the deserving dignitary? The third gap is related to
whose onus is it? Is it the DOD or the DPW, and if so, for whose account?

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PUBLIC F>EO>TECTOE?
SOUTH flfPIOl

9.3. The Allegation That The President's Family Improperly Benefitted From
The Project

9.3.1. On the original allegation that the President's brothers may have benefitted,
there is no evidence. Had this happened, the law is clear that this would have
been unlawful.

9.3.2. There is no question that his family benefitted from these as they now form
part of the President's estate.

9.3.3. The question that arises is whether or not the family has and will continue to
unduly benefit from the luxurious items not recommended in the security
evaluation.

9.4. Compliance of the Public Office Bearers and the Officials with the
Regulatory Framework Regulating the Procurement of Goods and
Services In Respect of the Nkandla Project

9.4.1. The evidence obtained from officials of the DPW approached during the
investigation confirmed that the practical application of the prescribed
regulatory framework in respect of the implementation of a new project would
be as follows:

9.4.1 .1 Any new project is generated based on a needs assessment prepared by the
client department, as approved by its accounting officer and presented to the
DPW head office.

9.4.1.2 The request for the implementation of the project is registered as a
programme and managed in accordance with the following principles:

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(a) Scope management-the client department's request and needs are
clearly identified, documented and approved. This includes any
standard norms, policies and standards that are applicable;

(b) Finance and time management- the project cost is determined and
budgeted for over the Medium Term Expenditure Framework cycle;

(c) Procurement and management-once the scope of the project has been
finalized and funds allocated, the prescribed procurement processes
are implemented. The procurement plan must be in line with the
relevant regulatory framework;

(d) Communication Management-the project manager is the centre point of
communication between the DPW, the client department and the
professional team; and

(e) Quality management.

9.4.2. It is not in dispute that the SAPS, the DOD and the DPW did not implement
and apply a proper demand management process in respect of the
implementation of the project, as was expected of the respective
departments in terms of the PFMA, the Treasury Regulations and the DPW
Supply Chain Management (SCM) Policy.

9.4.3. The original scoping of the Nkandla Project conducted by the Regional Office
was inadequate, which resulted in a misconception of the actual cost
involved.

9.4.4. The explanation provided to me during the investigation that it was not
possible to plan in advance due to the urgency of the Nkandla Project,

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cannot be accepted, if one takes into account that the appointment of
contractors for Phase 1 of the project was only approved in March 2010, i.e.
1 months after the project commenced.

9.4.5. No reasonable explanation was presented as to why a comprehensive needs

assessment could not have been drafted, costed and submitted by the client
departments to the DPW in order for everyone involved to participate in
decisions in respect of what measures were really necessary and reasonably
affordable.

9.4.6. It was also not clear why the DPW accepted that it was responsible for the
cost of the Nkandla Project despite the fact that the requirements in respect
of it came from the SAPS and the DOD as the client departments.

9.4.7. The designs of the Nkandla Project became more expensive and in certain

cases elaborate as time passed, which made it difficult for the DPW (that
mistakenly accepted responsibility for all the cost) to budget for its
implementation.

9.4.8. The sensitivities, importance, scale and cost of the Nkandla project clearly

warranted regular meetings between high level officials of the departments
involved, including the accounting officers, to discuss the extent of the
project, the expenditure involved, the value for money for the state and the
progress made, on a regular basis. This did not happen and everything was
basically left in the hands of the consultants and the DPW office bearers and
officials involved.

9.4.9. I could find no indication in the evidence that the officials of the DOD and
SAPS involved in the project reported to their respective accounting officers
on the involvement of their departments and its liability in terms of the

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expenditure. The National Commissioner of Police and the Chief of the
SANDF were clearly left in the dark due to the fact that the officials looked at
the DPW to foot the bill of their requirements. The accounting officers of the
SANDF and the SAPS were therefore not placed in a position where they
could perform their functions and take responsibility for the involvement of
their departments, in terms of section 38 of the PFMA.

9.4.10. The failure of the SAPS, DOD and DPW to implement a sensible and

affordable demand management process in respect of the Nkandla Project
was not in accordance with proper supply chain management practices that
could have linked it to strategic planning and budgeting processes, as is
envisaged and required by the PFMA, the Treasury Regulations and the
DPW SCM Policy. It was therefore improper and constitutes
maladministration.

9.4.1 1 . As I have indicated above, the DPW does not have any policy that regulates

the implementation of security measures at the private residences of
Presidents, Deputy Presidents, former Presidents and former Deputy
Presidents, as authorized by the relevant Cabinet Policy. The absence of any
guidelines in this regard left the officials involved with little direction and their
inability to manage the process properly was further compounded by the
involvement of the Minister and Deputy Minister, which was extraordinary.

9.4.1 2. It was expected of the DPW, the SAPS and the DOD, by the provisions of the

PFMA, the Treasury Regulations and Guidelines of the National Treasury to
budget properly and in advance for the Nkandla Project, which budgeting had
to be linked to the demand management process. The DPW erroneously
accepted responsibility for the cost of the project right from its inception.

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9.4.14.

9.4.15.

9.4.16.

9.4.17.

9.4.18.

Although the DPW probably could not have budgeted in advance for the
project prior to May 2009, as Mr Zuma's election as the President was not a
certainty, it was well aware of the need to secure the President's private
residence by August 2009.

However, the DPW still failed to include it during the 2010/2011 budget. It
also underestimated the extent of the expenditure in respect of the
201 1/2012 and 2012/2013 budgets, clearly as a result of not implementing a
proper demand management process, which resulted in the budgeted
amounts allocated to other necessary capital works programmes of the DPW
being negatively affected.

The evidence of Ms Motsisi, the former Chief Financial Officer of the DPW,
also indicates that the DPW had a tendency at the time of the implementation
of the Nkandla Project to over commit its Prestige Budget, which then had to
be corrected by shifting funds from other necessary projects.

The acceptance by the DPW of the responsibility for the cost of the Nkandla
Project and its failure to budget properly was contrary to what is required by
the PFMA and the Treasury Regulations. It was therefore improper and
constitutes maladministration.

Treasury Regulation 16A6.4 provides for a deviation from the default position
of inviting competitive bids in cases where it is impractical to do so.

Under such circumstances it would be permissible to procure goods or
services by other means, provided that the reasons are recorded and
approved by the accounting officer.

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9.4.20.

9.4.21.

9.4.22.

9.4.23.

9.4.24.

The typical circumstances covered by the directives and guidelines issued by
the National Treasury are urgent or emergency cases and where the service
or product can only be provided by a sole supplier.

In all cases where goods and services above the value of R1 million were
procured in terms of Regulation 16A6.4, it had to be reported to the National
Treasury and the Auditor-General.

The DPW records show that at the time when the Nkandla Project
commenced, the DPW's internal directives provided that procurement of
goods and services amounting to more than R20 million per procurement,
had to be submitted to and recommended by the Special National Bid
Adjudication Committee (SNBAC).

However, in the case of this project, procurement strategies were submitted
to and approved by the Regional Bid Adjudication Committee (RBAC), in
terms of a delegation issued by the then Acting Director-General, Mr
Malebye, authorizing it to do so in amounts above R20 million.

The only motivation in the evidence obtained during the investigation for the
decision to delegate unlimited authority to the RBAC, was that the Nkandla
Project had to be fast tracked due to the fact that it related to the security of
the President and that submission of requests for the approval of
procurement strategies to the SNBAC would only have caused delays.

Although this decision of the Acting Director-General was within his powers
and authority in terms of section 38 of the PFMA, it does not seem to have
taken into account the fact that the SNBAC was established at the National
Office of the DPW, consisting of senior and experienced staff to ensure
proper compliance with the relevant Supply Chain Management Policy and

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prescripts, responsible procurement strategies and value for money, in cases
where the expenditure of public funds was to go as high as R20 million.

9.4.25. I could find no indication in the evidence that any measures or strategies to
expedite submissions to the SNBAC in the case of the Nkandla Project, as a
special arrangement, was investigated or considered.

9.4.26. It is not clear to me how the RBAC suddenly became better qualified to
consider procurement strategies and procurement of goods and services of
more than R20 million in the case of the Nkandla Project, when other such
projects, still had to be submitted to the SNBAC.

9.4.27. Mr Malebye's decision in my view failed to comply with the standard of care
required of an accounting officer in terms of section 38 of the PFMA was
therefore improper and constitutes maladministration.

9.4.28. Regarding the appointment of Mr Makhanya, as Principle Agent and overall

architect, the first issue is whether or not it was proper to do so without going
on tender. On the basis of the original quotes, which were under R500 000,
only three quotes were needed. Once the project scope became wider, it
needed to go on tender, the alternative being "allowed deviations". His
appointment did not satisfy the requirements of the legal framework.

9.4.29. The next issue is that of conflict of interest. Conflict of interest arises when a

person is placed in a position of serving two masters. The President's legal
team disagreed in their submissions with my view that Mr Makhanya had a
conflict of interest as far as his involvement in the Nkandla Project was
concerned. According to them, there is nothing wrong with an architect acting
on behalf of a private client (who also happens to be the head of state) and

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as the Principal Agent and architect for the state in designing works for the
same premises. It was not clear to me how they envisaged Mr Makhanya
was supposed to have dealt with a situation where the interests of the state
clashed with that of his private client.

9.4.30. Mr Makhanya, in my view, allowed himself to be placed in a precarious

position as a professional consultant. He had to look after the personal
interests of the President in respect of his private construction works and also
after those of the state in respect of the implementation of the project. The
fact that he was appointed by the President, had direct access to him and
reported to him on the project from time to time, naturally had an impact on
the officials involved who would have been reluctant to confront him as the
Principal Agent, on his designs. The evidence indicated that he was directing
the Project Manager what to do, instead of the opposite.

9.4.31. There is no indication in the evidence that the DPW considered Mr

Makhanya's qualifications and appropriate experience to design a security
project of this magnitude . He should, in my respectful view, not have been
involved in the Nkandla Project. Instead, he should have been consulted
where there were overlaps between the project and the President's private
works.

9.4.32. No other convincing or acceptable reason pointing at the requirements of

Treasury Regulation 16A6.4 could be provided to me during the investigation
for the deviation from the competitive process required by section 217 of the
Constitution, in this case.

9.4.33. Under the circumstances, the failure to comply with the prescribed
competitive bidding process as far as the procurement of the services of the

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consultants referred to above is concerned, was improper and amounts to
maladministration.

9.4.34. The DPW Directive on Acquisition and Disposal Management provides that

the nominated procurement strategy is undesirable and may only be
approved as a last resort. It may be used in emergency cases, where there
are time constraints in carrying out the service or for the supplying of goods
or where the services required are of a specialized nature.

9.4.35. It is not in dispute that there was no emergency when the appointment of the

private Project Manager (Ramcon) was considered, that required a deviation
from an open competitive bidding process. The only urgency indicated at the
time was that due to the President's complaints, the Ministry of Public Works
had determined a target date for completion that had to be complied with.

9.4.36. The records of the DPW, including the Minutes of Progress Meetings,

indicate that at the time when it was decided to appoint a private Project
Manager there were serious delays in the Nkandla Project and that the DPW
Project Manager was struggling. The time constraints were therefore self-
imposed and the result of inordinate delays in the project on the part of the
DPW, which was clearly, as confirmed by the evidence, the result of a lack of
proper planning and management.

9.4.37. The decision to deviate from an open and competitive bidding process to

appoint a private Project Manager by means of a nominated procurement
strategy did not comply with the requirements of section 217 of the
Constitution, the PFMA, the Treasury Regulations and the SCM Policy and
prescripts of the DPW. It was therefore improper and amounts to
maladministration.

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9.4.38. I could find no indication that the situation at the time when it was decided to

approve a nominated procurement strategy in respect of the appointment of a
contractor for the so called "emergency works", constituted an emergency or
urgency that was not caused by inordinate delays and a lack of planning on
the part of DPW itself. The Nkandla Project was already 10 months old by
then and no attempt had been made to appoint contractors to implement
works that were described as "emergency.

9.4.39. The DPW records furthermore do not indicate that an informed decision was

taken by the RBAC that it was impractical to utilize an open and competitive
bidding processes, even if it was shortened. The argument presented by Mr
Rindel that the screening of contractors would take up to four months to
complete was only based on previous experience.

9.4.40. There is no indication in the evidence and information that I obtained during

the investigation that the DPW approached NIA (SSA) to assist it in
expediting the screening process, should an open tender process be
followed, especially as the Nkandla Project related to the private residence of
the President. It is also not clear to me why the details of the scope of works
could not have been provided to qualifying interested contractors after the
screening process had been completed.

9.4.41 . The decision of the RBAC to approve the nominated procurement strategy

which resulted in the appointment of Bonelena was not in accordance with
the requirements of competitive bidding, as contemplated by section 217 of
the Constitution, the PFMA, Treasury Regulations and the DPW SCM Policy
and directives. It was improper and constitutes maladministration.

9.4.42. The DPW Directive on Acquisition and Disposal Management regards the
negotiated procurement strategy as the least desirable, provides that it can

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only be approved by the Bid Adjudication Committee as a last resort and that
it may only be used, inter alia, in urgent or emergency cases when the
competitive bidding process is impractical, provided that the circumstances
giving rise to the urgency were neither foreseeable by the DPW nor the result
of the dilatory conduct on its part.

9.4.43. I found no indication during the investigation that the motivation for the

deviation considered by the RBAC in respect of the appointment of
Moneymine 310 CC (Moneymine) in Phase 1 of the project included any
reference to emergency or urgency.

9.4.44. The evidence further does not indicate that the suggestion by Mr Rindel in

respect of the impact of the appointment of another contractor on the
guarantees provided to the President by Moneymine, was properly
interrogated and informed. No reasonable explanation was presented to me
why the issue of integration with the private works and the providing of
guarantees could not have been negotiated and agreed upon between
Moneymine and another contractor.

9.4.45. I cannot reasonably conclude that the circumstances 10 months after the

Nkandla Project commenced, could have been such that a competitive
bidding process was impractical and that the negotiated procurement
process followed to appoint Moneymine was the last resort available to the
DPW.

9.4.46. The decision by the RBAC to approve the negotiated procurement strategy

was probably influenced by the fact that Moneymine had been appointed by
the President for his private construction works. It was not in compliance with
the requirements of competitive bidding, as contemplated by section 217 of

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the Constitution, the Treasury Regulations and the DPW SCM Policy and
prescripts, was therefore improper and constitutes maladministration.

9.4.47. No reference was made to emergency, urgency or whether it was at all

impractical to employ an open and competitive bidding process to procure
the services of contractors for the implementation of Phase 2 of the project,
costing millions of rand.

9.4.48. The RBAC's decision to approve negotiated procurement strategies in
respect of Bonelena and Moneymine for Phase 2 was clearly influenced by
what was regarded as instructions from the Deputy Minister.

9.4.49. I could find no reasonable indication from the evidence of the officials and the

records of the DPW why the negotiated procurement strategy was regarded
as the last resort. The decision of the RBAC in this regard did not consider
the prescribed requirements for deviation and was not in compliance with the
provisions of section 217 of the Constitution, the Treasury Regulations and
the DPW SCM Policy and directives. It was therefore improper and
constitutes maladministration.

9.4.50. By the time that the order for bullet resistant glass was issued, Mr Zuma had

been the President for 1 year and 10 months. It therefore cannot be argued
that an immediate emergency or urgency arose, that was not prevalent at the
time of his appointment, which could have justified a deviation from a
competitive bidding process for a procurement of more than R3 million.

9.4.51 . If there was an emergency, it was in any event the result of poor planning

and management of the project on the part of the DPW. There is also no
indication in the evidence that it was impractical to have utilized a more
competitive procurement process.

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9.4.52. A direct order was placed and the procurement prescripts violated by the
officials involved because of instructions given by the Minister, who was
under pressure from the President.

9.4.53. If the installation of the bullet resistant glass had been properly planned, the

impact on ventilation would have been obvious. This could then have been
addressed by means of a more competitive procurement process. The DPW
was solely responsible for the urgency that arose and the resultant deviation
from the prescribed procurement process.

9.4.54. I am of the view that the deviations from the default procurement process, i.e.

open and competitive bidding in the procurement of bullet resistant glass
from SA BRG Glass and the air conditioning units, were not in compliance
with the standard prescribed by section 217 of the Constitution, the PFMA,
Treasury Regulations and the DPW SCM Policy and prescripts. It violated the
constitutional imperative of competition, was therefore improper and amounts
to maladministration.

9.4.55. The failure by the DPW to record the reasons and decisions relating to the

procurement of lifts of more than R2 million without following an open bidding
process was a violation of the provisions of the Treasury Regulations and
constitutes maladministration.

9.4.56. From the evidence there is also no clear indication as to why a deviation from

a competitive bidding process was justified as far as the procurement of the
lifts for the safe haven was concerned. The decision of the RBAC to approve
a nominated procurement strategy therefore has to be regarded as having
violated the standard prescribed by section 217 of the Constitution, the

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PFMA, Treasury Regulations and the DPW SCM Policy and directives. It was
therefore improper and constitutes maladministration.

9.4.57. The DPW was requested on numerous occasions during the investigation to

submit copies of the notifications to the National Treasury of all the deviations
of more than R1 million, but no such evidence was provided. I therefore have
to accept that the DPW failed to comply with the directive to report such
deviations to the National Treasury, which is improper and amounts to
maladministration.

9.4.58. The delegations issued by the Director-General of the DPW on 3 October

2005 provided that a reference to a "Project Manager" included all the
professional staff members of the Chief Directorate: Professional Services,
tasked with projects relating to the built environment.

9.4.59. The obvious purpose of this requirement was to ensure that the Project

Manager is provided with and has access to professional advice during the
implementation of a project in order to achieve the desired result and
product.

9.4.60. The side-lining of the professional team during the implementation of the

Nkandla Project was not in line with the delegations of the Director-General
that established the position and authority of the Project Manager, which was
subject to their involvement in the project. It was therefore improper and
constitutes maladministration.

9.4.61 . In terms of the said delegations, the sketch plans and/or preliminary designs

of the Nkandla Project had to be subjected to a Scrutiny Committee at the
DPW Head Office. The final approval of these plans and designs could only
have been executed subject to comments by the Scrutiny Committee.

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9.4.62. I could find no evidence that any of the sketch plans or the designs of the
Nkandla Project was ever submitted to a Scrutiny Committee, either at the
Regional or Head Office.

9.4.63. The approval of the plans and designs and amendments thereto therefore did
not follow the prescribed process of evaluation and scrutiny, as per the
authority delegated by the accounting officer in terms of the PFMA.

9.4.64. The failure of the DPW to comply with the requirements of the delegations in
this regard was improper and constitutes maladministration.

9.4.65. The DPW conceded during the investigation that it failed to comply with the

provisions of GIAMA in respect of the assets that it required as a result of the
implementation of the Nkandla Project. This failure was improper and
constitutes maladministration.

9.4.66. The manner in which the Nkandla Project was administered and

implemented gave me the impression of a toxic concoction of a lack of
leadership, a lack of control and focused self-interest. The fear factor among
officials was (and in some cases still is) prevalent due to the fact that the
project related to the President's house and that the Minister and Deputy
Minister were directly involved.

9.5.1. It is common cause that the President was briefed by officials of the SAPS

and DOD when the Nkandla Project started on the measures that had to be
installed in his private dwellings. He has not denied that he was informed
from time to time on certain aspects of the project by Mr Makhanya and

9.5.

The President's Alleged Ethical Violations

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Deputy Minister Bogopane-Zulu and reports were occasionally forwarded for
his attention.

9.5.2. The President was also provided with a detailed progress report on 5
November 201 1 by the former Minister of Public Works.

9.5.3. The President was therefore aware of what the Nkandla Project entailed. He
obviously also observed the scale and extent of the project when he visited
his private residence during the period of implementation.

9.5.4. The fact that he complained on more than one occasion of the lack of

progress made with the project and the impact that it had on his private life
and that of his family clearly shows that he was aware of the measures taken
and the status of its implementation.

9.5.5. We have also ascertained some direct involvement related to his request that
the design of the bullet resistant windows be changed and a kraal be built.

9.5.6. There is no evidence that the President raised his concern or disapproval on
the scale of the project that was being implemented at his private residence
or the cost thereof with the Ministers or officials involved.

9.5.7. The mere magnitude of the Nkandla Project, the many buildings constructed,

including underground facilities and substantial landscaping interventions, the
swimming pool and terrace, amphitheater, kraal and culvert, Visitors Centre,
elaborate paving and the space created for a marquee tent, would, in my
view, have prompted any reasonable person in the position of the President
to seriously question the need for certain items and the expense to the fiscus
of funds that could have been used somewhere else where there are service
delivery needs, poverty and unemployment.

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9.5.8. Regarding his ethical conduct I considered it proper to ask him the same

questions that I had to ask of the former Minister of Cooperative Governance
and Traditional Affairs, the late Mr S Shiceka, and the Minister of Police, Mr
N Mthethwa, when I investigated allegations of unethical conduct against
them. These included did he raise any concerns about obvious extravagant
and expensive measures that were being implemented by the state at his
private residence?

9.5.9. In the case of my investigation into extravagant expenditure by the Minister of

Police on hotel accommodation (Report no 7 of 2011/12), I found that the
Minister, when he became aware of the extent of the expenditure, took steps
to contain it and to prevent a recurrence thereof.

9.5.10. The standards of ethical conduct set by the provisions of section 96 of the

Constitution and the Executive Ethics Code require of a person in the
position of the President to have been concerned about the obvious
elaborate scale of the project that was being implemented at his private
residence and the cost thereof to the state.

9.5.11. As the ultimate upholder of the values of the Constitution and custodian of

public funds, it was, in my respectful opinion, expected of him to have
interrogated the need for measures, such as the underground safe haven,
the relocation of households, the construction of a Visitors Centre, swimming
pool, amphitheatre etc. which were both extensive and in some instances
had no obvious relation to his protection and the security of the premises.

9.5.1 2. The evidence in connection with the changes that were made in the design of
the bullet resistant windows after he complained about it and the building of
the kraal, is indicative thereof that any other concerns that he would have

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raised would have been taken seriously. A substantial amount of public
money would have been saved, had the President raised his concerns in
time. By failing to do so, the President allowed or caused extensive and
excessive upgrades that go beyond necessary security measures to be made
to his private residence, at state expense.

9.5.13. Another question regarding ethical conduct by the President related to him

reportedly telling Parliament and the nation that no building was constructed
for him by government. The evidence shows that these structures were
constructed for him at state expense. The structures on the homestead part
of the fence include the Visitors' Centre, cattle kraal with chicken run,
swimming pool and amphitheatre. Misleading Parliament is prohibited by the
Executive Ethics Code. My decision on his conduct is in the findings.

9.5.14. The pertinent question related to the fact that the President may have misled

Parliament and accordingly violated the Executive Ethics Code when he
announced that the renovations at his private residence were financed
through a bank mortgage bond. I deal with this in the findings.

9.6.1. The Construction Of Buildings And Other Structures On Land That Belongs
To The Ingonyama Trust

9.6.1.1 In terms of the provisions of the KwaZulu-Natal Ingonyama Trust Act, 1994,

the Kwazulu-Natal Ingonyama Trust Board required the written consent of the
relevant traditional authority or community, before it could enter into a lease
agreement with the DPW.

9.6.

Other Observations

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9.6.1.2 According to the evidence the requisite legal process to regularise building
on trust land was no concluded.

9.6.1.3 The DPW proceeded with the construction of buildings and other structures

on the land immediately adjacent to the land occupied by the President's
private residence, despite the fact that no lease agreement had been
concluded with the KwaZulu-Natal Ingonyama Trust Board.

9.6.1.4 In other words, the DPW does not have legal tenure of the land and the
construction of the buildings..

9.6.1 .5 The implementation of the Nkandla Project leaves one with the impression of

excessive and unconscionable "Rolls Royce" security constituting an island in
a sea of poverty and paucity of public infrastructure. This cannot be accepted
as conscionable in any state and certainly not in a state where section 195
and 237 of the Constitution promise to put people first and where the Batho
Pele White Paper undertakes to transform the state from the insular
apartheid state to one that is people centred and puts people first

9.6.2. The submission of the final report

9.6.2.1 The issue of the competent authority to receive the report is one of the

controversies that bedevilled the report. As indicated, the matter arises on
account of the President being the competent authority to act on my findings
under the EMEA, while in the current case he is the alleged wrongdoer.

9.6.2.2 Dr Lubisi informed me that the relevant amendments to the Executive

Members' Ethics Act, as requested in my 2010 report, are still in process and
will not be completed by the time that my final report on the investigation is
issued.

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10.

FINDINGS

I make the following findings:

10.1. Was there any legal authority for the installation and implementation of

security measures and the construction of buildings and other items at
the President's private residence and was such authority violated or
exceeded?

10.1 .1 . The authority for implementing security measures at the private residence of

the President is primarily conferred by the Cabinet Policy of 2003. In view of
the Declaration of the residence as a National Key Point during the
implementation of the security measures, the National Key Points Act,
constitutes part of the legal framework conferring authority to upgrade
security at a private residence. However, the implementation of the security
measures failed to comply with the parameters set out in the laws in question
for the proper exercise of such authority.

10.1 .2. The key violation in this regard is the failure to follow the processes outlined

in the Cabinet Policy and the deviation from the 16 security measures that
were recommended in the Second Security Evaluation by SAPS. This
constitutes improper conduct and maladministration.

1 0.1 .3. With the National Key Points Act having been inexplicably dragged in halfway

through the implementation of the Nkandla Project, its provisions had to be
complied with. This did not happen. Neither was there compliance with the
contents of the declaration of the Nkandla Residence as a National Key
Point, as signed by the Minister of Police on 08 April 2010.

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10.1.4.

10.2.

10.2.1.

10.2.2.

In relation to installations at the request of the Surgeon General on behalf of
the DOD and SAMHS, there appears to be no instrument specifically
authorizing the construction of brick and mortar installations at or for a private
household. The installations were justified on generic military doctrines aimed
at installations built in pursuit of public services and the general power given
to the SAMHS to provide health services to the President Deputy President,
Minister and Deputy Minister of Defence and, at the request of the Minister of
International relations, foreign dignitaries.

Was the conduct of relevant authorities in respect of the procurement
of goods services relating to the Nkandla Project improper and in
violation of relevant prescripts?

The organs of state involved in the Nkandla Project failed dismally to follow
Supply Chain Management prescripts, such as section 217 of the
Constitution, PFMA, Treasury Regulations the DPW Supply Chain
Management policy, key omissions including: the absence of demand
management; improper delegations; failure to procure services and goods
costing above R500 000 through a competitive tender process; failure to
conduct due diligence leading to the engagement of service providers such
as the Principal Agent without the necessary qualifications or capacity for
security measures; failure to ensure security clearance for service providers,
and allowing "scope creep" leading to exponential scope and cost
escalations.

In addition, the DPW failed to comply with the provisions of GIAMA, which
specifically require a proper asset management plan in respect of the
immovable assets of the state.

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10.2.3. The conduct of all organs of state involved in managing the Nkandla Project,
particularly officials from the DPW, who unduly failed to comply with Supply
Chain Management prescripts was unlawful and constitutes improper
conduct and maladministration. The DOD and SAPS officials failed to comply
with Treasury Regulation 16A.3.2 imposing the responsibility for demand
management on client departments, which include ensuring cost effective
measures and budgeting, appropriately for such.

10.3. Did the measures taken by the DPW at the President's private
residence, go beyond what was required for his security?

10.3.1. A number of the measures, including buildings and other items constructed
and installed by the DPW at the President's private residence went beyond
what was reasonably required for his security. Some of these measures can
be legitimately classified as unlawful and the acts involved constitute
improper conduct and maladministration.

10.3.2. Measures that should never have been implemented as they are neither
provided for in the regulatory instruments, particularly the Cabinet Policy of
2003, the Minimum Physical Security Standards and the SAPS Security
Evaluation Reports, nor reasonable, as the most cost effective to meet
incidental security needs, include the construction inside the President's
residence of Visitors' Centre, an expensive cattle kraal with a culvert and
chicken run, a swimming pool, an amphitheatre, marquee area, some of the
extensive paving and the relocation of neighbours who used to form part of
the original homestead, at an enormous cost to the state. The relocation was
unlawful as it did not comply with section 237 of the Constitution. The

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implementation of these installations involved unlawful action and constitutes
improper conduct and maladministration.

10.3.3. Measures that are not expressly provided for, but could have been

discretionally implemented in a manner that benefits the broader community,
include helipads and a private clinic, whose role could have been fulfilled by
a mobile clinic and/or beefed up capacity at the local medical facilities. The
measures also include the construction, within the state occupied land, of
permanent, expensive but one roomed SAPS staff quarters, which could
have been located at a centralized police station. The failure to explore more
economic and community inclusive options to accommodate the discretional
security related needs, constitutes improper conduct and maladministration.

10.4. Was the expenditure incurred by the state in this regard excessive or
amount to opulence at a grand scale, as alleged?

10.4.1. The expenditure incurred by the state in respect of the measures taken,

including buildings and other items constructed or installed by the DPW at
the request of the SAPS and DOD, many of which went beyond what was
reasonably required for the President's security, was unconscionable,
excessive, and caused a misappropriation of public funds. The failure to
spend state funds prudently is a contravention of section 195 (1)(b) of the
Constitution and section of the Public Finance Management Act. The acts
and omissions involved are, accordingly, unlawful and constitute improper
conduct and maladministration.

10.4.2. The first Complainant's allegation that the expenditure constitutes opulence
at a grand scale is substantiated. The acts and omissions that allowed the

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excessive expenditure due to non-security items and failure to arrest the wild
cost escalation, especially after the story broke in the media in December
2009, constitute improper conduct and maladministration.

10.5. Did the President's family and/or relatives improperly benefit from
installations implemented by the state at his private residence?

10.5.1. The allegation that President Zuma's brother improperly benefitted from the
measures implemented is not substantiated. I could find no evidence
supporting the allegations that the President's brothers benefitted from the
procurement of electrical items for the implementation of the Nkandla Project.

10.5.2. The allegation that the excessive expenditure added substantial value to the
President's private property at the expense of the state is substantiated. The
excessive and improper manner in which the Nkandla Project was
implemented resulted in substantial value being unduly added to the
President's private property. The acts and omissions that allowed this to
happen constitute unlawful and conduct improper conduct and
maladministration.

1 0.5.3. The original allegation that President Zuma's immediate family members also
improperly benefitted from the measures implemented is substantiated.
President Zuma improperly benefited from the measures implemented in the
name of security which include non-security comforts such as the Visitors'
Centre, such as the swimming pool, amphitheatre, cattle kraal with culvert
and chicken run. The private medical clinic at the family's doorstep will also
benefit the family forever. The acts and omissions that allowed this to happen
constitute unlawful and improper conduct and maladministration.

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10.5.4. I do not find the relocation of the tuck shop as a benefit as the business was
moved at the instance of the state to a building that might even be
inconvenient to the owner.

10.5.5. The conduct of the DPW leading to the failure to resolve the issue of items

earmarked for the owner's cost transparently, including the failure to report
back on the swimming pool question after the 1 1 May 201 1 meeting and the
disappearance of the letter proposing an apportionment of costs, constitutes
improper conduct and maladministration

10.6. Was there any maladministration by public office bearers, officials and
other actors involved in the project?

10.6.1. Public Office Bearers:

10.6.1.1 All the Ministers of Public Works provided incorrect information on the legal
authority for and the extent of the works at the President's private residence.

10.6.1.2 The Minister of Police failed to properly apply his mind when signing the

Declaration of President Zuma's private residence as a National Key Point
directing the President to implement security measures at own cost or to
properly modify the Declaration. This failure constitutes improper conduct
and maladministration.

10.6.1.3 The former Minister of Public Works, Mr G Doidge and the Minister of Police
could have provided better executive leadership, especially with regard to

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speedily accessing the extent and cost of the Nkandla Project, particularly
when the media broke the story in 2009 and taking decisive measures to
curb excessive expenditure. Their failure in this regard constitutes improper
conduct and maladministration

10.6.2. Officials of the DPW:

10.6.2.1 The DPW officials failed to acquaint themselves with the authorizing
instruments relating to the implementation of the Nkandla Project. They failed
to apply their minds and adhere to the supply chain management policy
framework in respect of the procurement of goods and services for the
Nkandla Project. These failures constitute improper conduct and
maladministration.

1 0.6.2.2 Messrs Malebye and Vukela, the Acting Directors-General of the DPW failed

as the accounting officers of the Department at the material times to comply
with and/or ensure compliance with the provisions of sections 1 95(1 )(b) and
217 of the Constitution, the PFMA, Treasury Regulations and prescripts and
the DPW Supply Chain Management Policy in respect of the Nkandla Project
was improper and constitutes maladministration.

10.6.2.3 Ms G Pasely, the Chief Quantity Surveyor showed exemplary conduct by
raising her concerns about the excessive escalation in the cost of the Project.
It is unfortunate that her concerns in this regard were not taken seriously.

10.6.3. Officials of the SAPS:

10.6.3.1 The SAPS officials failed to acquaint themselves with the authorizing
instruments relating to the implementation of the Nkandla Project. They failed

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to apply their minds and adhere to the supply chain management policy
framework in respect of the procurement of goods and services for the
Nkandla Project. These failures constitute improper conduct and
maladministration.

10.6.3.2 Brigadier Adendorff, the Head of Security Advisory Service failed to comply
with and or ensure compliance with the provisions of sections 1 95(1 )(b) and
217 of the Constitution, the PFMA, Treasury Regulations and prescripts in
respect of the area of her responsibility relating to the Nkandla Project was
improper and constitutes maladministration

10.6.4. Officials of the POD

10.6.4.1 The DOD officials failed to acquaint themselves with the authorizing
instruments relating to the implementation of the Nkandla Project. They failed
to apply their minds and adhere to the supply chain management policy
framework in respect of the procurement of goods and services for the
Nkandla Project. These failures constitute improper conduct and
maladministration.

10.6.4.2 Lt Gen Ramlakan, the former Surgeon-General, failed to comply with and or
ensure compliance with the provisions of sections 1 95(1 )(b) and 217 of the
Constitution, the PFMA, Treasury Regulations and prescripts in respect of his
area of responsibility relating to the Nkandla Project was improper and
constitutes maladministration.

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10.6.5. The Contractors

10.6.5.1 Mr Makhanya's assumption of multiple and conflicting roles as Principal

Agent, the President's architect and procurer of some of the subcontractors
which placed him in a position where the advice he gave was tainted by
conflict of interest and not in the public interest, which led to uncontrolled
scope creep, cost escalation and poor performance by some of the
contractors.

10.7. Was there any political interference in the implementation of this
project?

10.7.1.1 The former Minister of Public Works, Mr G Doidge, and Deputy Minister

Bogopane-Zulu were at some stage involved in the implementation of the
Nkandla Project. Their involvement, albeit for a short period of time, appears
to have created an atmosphere that was perceived as political interference or
pressure, although the evidence does not show any such intent on their part.

10.7.1.2 The Task Team Report also indicated that officials were uneasy with the
operational involvement of politicians in the Nkandla Project.

10.7.1.3 Their involvement at trench level, including the Deputy Minister making

suggestions on how to meet perceived security need, was ill advised
although well intended in the light of failures in meeting the project timelines.
While I would discourage such acts in similar future circumstances, I am
unable to find their attempts at problem solving as constituting improper
conduct or maladministration.

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10.8. Were funds transferred from other much needed DPW projects to fund
this project?

10.8.1.1 Funds were reallocated from the Inner City Regeneration and the Dolomite

Risk Management Programmes of the DPW. Due to a lack of proper demand
management and planning service delivery programmes of the DPW were
negatively affected. This was in violation of section 237 of the Constitution
and the Batho Pele White Paper and accordingly constitutes improper
conduct and maladministration.

1 0.9. Is the President liable for some of the cost incurred?

10.9.1 .1 If a strict legal approach were to be adopted and the National Key Points Act

was complied with, President Zuma would be held to the provisions of the
Declaration of the Minister of Police issued on 08 April 2010, which informs
him of the decision to declare his private Nkandla residence a National Key
Points and directs him to secure the National Key Point at his own cost.

10.9.1.2 However, that approach would not meet the dictates of fairness as the

Presidents, Deputy Presidents, former Presidents and former Deputy
Presidents are entitled, under the Cabinet Policy of 2003, to reasonable
security upgrades, at their request or that of their office at state expense
under the. Even on the understanding that some of the measures were
unauthorized and transcended security measures as envisaged in the
regulatory instruments and security evaluation findings, the questionable
measures implemented exceed the financial means of an ordinary person. It
is further clear from all communication by President Zuma that he was never
familiarized with the provisions of the National Key Points Act and,

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specifically, the import of the declaration. The declaration itself was
apparently delivered to his office in April 201 1 , a year after it was made and
more than two years after the security installations had commenced.

10.9.1.3 The DPW mismanaged the process initiated with a view to determining the

cost to be paid by President Zuma in respect of security measures installed
at and in support of his private residence at Nkandla and which was initially
estimated at more than R10 million, leading to a situation where to date,
there is no clarity on that matter. This constitutes improper conduct and
maladministration.

10.9.1.4 It is my considered view that as the President tacitly accepted the

implementation of all measures at his residence and has unduly benefited
from the enormous capital investment from the non-security installations at
his private residence, a reasonable part of the expenditure towards the
installations that were not identified as security measures in the list compiled
by security experts in pursuit of the security evaluation, should be borne by
him and his family.

1 0.9.1 .5 It is also my considered view that the amount in question should be based on

the cost of the installation of some or all the items that can't be conscionably
accepted as security measures. These include the Visitors' Centre, cattle
kraal and chicken run, swimming pool and amphitheatre. The President and
his legal advisers, did not dispute this in their response to the Provisional
Report. The President did not dispute during the investigation that he told me
on 1 1 August 2013 that he requested the building of a larger kraal, and that
he was willing to reimburse the state for the cost thereof.

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10.10. Were there ethical violations on the part of the President in respect of
the project?

10.10.1.1 President Zuma told Parliament that his family had built its own houses and

the state had not built any for it or benefited them. This was not true. It is
common cause that in the name of security, government built for the
President and his family at his private residence a Visitors' Centre, cattle
kraal and chicken run, swimming pool and amphitheatre among others. The
President and his family clearly benefitted from this.

10.10.1.2 I have accepted the evidence that he addressed Parliament in good faith and

was not thinking about the Visitors' Centre, but his family dwellings when he
made the statement. While his conduct could accordingly be legitimately
construed as misleading Parliament, it appears to have been a bona fide
mistake and I am accordingly unable to find that his conduct was in violation
of paragraph 2 of the Executive Ethics Code. His statement is also consistent
with those made by the Ministers of Public Works throughout the public
outcry over the Nkandla expenditure. I am accordingly unable to find that his
conduct was in violation of paragraph 2 of the Executive Ethics Code.

10.10.1.3 Regarding President Zuma's conduct in respect of the use of state funds in

the Nkandla Project, on the only evidence currently available, the President
failed to apply his mind to the contents of the Declaration of his private
residence as a National Key Points and specifically failed to implement
security measures at own cost as directed by it or to approach the Minister of
Police for a variation of the Declaration.

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10.10.1.4 It is my considered view that the President, as the head of South Africa

Incorporated, was wearing two hats, that of the ultimate guardian of the
resources of the people of South Africa and that of being a beneficiary of
public privileges of some of the guardians of public power and state
resources, but failed to discharge his responsibilities in terms of the latter. I
believe the President should have ideally asked questions regarding the
scale, cost and affordability of the Nkandla Project. He may have also
benchmarked with some of his colleagues. He also may have asked whose
idea were some of these measures and viewed them with circumspection,
given Mr Makhanya's non-security background and the potential of
misguided belief that his main role was to please the President as his client
and benefactor.

10.10.1.5 It is also not unreasonable to expect that when news broke in December

2009 of alleged exorbitant amounts, at the time R65 million on questioned
security installations at his private residence, the dictates of sections 96 and
237 of the Constitution and the Executive Ethics Code required of President
Zuma to take reasonable steps to order an immediate inquiry into the
situation and immediate correction of any irregularities and excesses.

10.10.1.6 His failure to act in protection of state resources constitutes a violation of

paragraph 2 of the Executive Ethics Code and accordingly, amounts to
conduct that is inconsistent with his office as a member of Cabinet, as
contemplated by section 96 of the Constitution.

10.10.1.7 Regarding the allegation that the President may have misled Parliament and

accordingly violated the Executive Ethics Code when he announced that the
renovations at his private residence were financed through a bank mortgage
bond, I am unable to make a finding. Although having established through

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the Register of Financial Interests that the President has declared a
mortgage bond in respect of his private residence at Nkandla since 2009, I
am not able to establish if costs relating to his private renovations were
separated from those of the state in the light of using the same contractors
around the same time and the evidence of one invoice that had conflated the
costs although with no proof of payment.

10.11. Other Findings of Maladministration

10.11.1.1 The occupation by the state of the land adjacent to that occupied by the

President, and where security and other measures were constructed and
installed by the DPW is unlawful and improper as it violates the provisions
and requirements of the KwaZulu-Natal Ingonyama Trust Act, 1994 that
requires a proper lease agreement. It also constitutes maladministration.

1 0.1 1 .1 .2 The conduct of some of the role players unduly delayed the investigation.

1 0.1 2. Systemic Deficiencies Observed During the Investigation

10.12.1.1 The anomalies in the Nkandla Project point to the existence of systemic

policy gaps and administrative deficiencies in the regulatory framework used
as authority for implementing security measures at the private residences of
ones of Presidents, Deputy Presidents, former Presidents and former Deputy
Presidents, key among these being the absence of a cap and an integrated
instrument such as the Ministerial Handbook, where all permissible measures
can be found.

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10.12.1.2 In view of the fact that the Cabinet Policy of 2003 applies equally to all

Presidents, Deputy Presidents, former Presidents and former Deputy
Presidents, there is real risk of a repeat of the Nkandla excesses in respect
of any of the four covered categories of public office bearers in the future. As
the policy applies to all residences of incumbents in any of the four
categories, the risk of unbridled expenditure in the future is very real and
needs immediate curbing.

10.12.1.3 DOD deficiencies, including no instruments for according and regulating the

exercise of discretion and concentration of power on a single individual with
no accountability arrangements, emphasized the need for a proper policy
regime regulating security measures at the private residences of the
President, Deputy President, Minister and Deputy Minister of Defence.

10.12.1.4 Need for a clear demarcation of the roles of the SAPS, DPW and DOD in
respect of such projects.

1 0.1 3. The Impact of the Nkandla Project

10.13.1.1 A number of the items installed by the DPW, such as the safe haven,

swimming pool, paved roads and walkways as well as water and electricity
supply, will require lifetime maintenance at cost to the state. Some
maintenance costs may transcend the President's lifetime.

1 0.1 3.1 .2 The military clinic also requires maintenance, supplies and permanent human
resources as long as it exists, which may be beyond the President's lifetime.

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10.13.1.3 The future of the buildings constructed at the request of the SAPS also need
to be determined.

11.1. The President is to:

11.1.1. Take steps, with the assistance of the National Treasury and the SAPS, to

determine the reasonable cost of the measures implemented by the DPW at
his private residence that do not relate to security, and which include Visitors'
Centre, the amphitheatre, the cattle kraal and chicken run, the swimming
pool.

1 1 .1 .2. Pay a reasonable percentage of the cost of the measures as determined with
the assistance of National Treasury, also considering the DPW
apportionment document.

11.1.3. Reprimand the Ministers involved for the appalling manner in which the
Nkandla Project was handled and state funds were abused.

1 1 .1 .4. Report to the National Assembly on his comments and actions on this report
within 14 days.

11.

REMEDIAL ACTION

Remedial action to be taken in terms of section 182(1)(c) of the
constitution is the following:

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11.2.

11.2.1.

11.2.2.

11.2.3.

11.2.4.

11.3.
11.3.1.

The Secretary to the Cabinet to take urgent steps to:

Update the Cabinet Policy of 2003 to provide for a more detailed regime;

Assist Cabinet to set clear standards on the security measures that can be
taken, the reasonable cost that can be incurred by the state and the
conditions subject to which current and former Presidents and Deputy
Presidents would qualify for such measures;

Take periodic measures to familiarize all members of the Cabinet with the
parameters for enjoying executive benefits and the responsibilities they have
to ensure that officials do not give them benefits transcending what they are
entitled to under the law or policies; and

The Department of Defence creates Standard Operating Procedures
regulating the implementation of the benefits extended to Presidents, Deputy
Presidents, the Minister and Deputy Minister of Defence and foreign
dignitaries (at the request of the Minister of International Relations), which is
aligned with the principles of equality, proportionality, reasonableness and
justifiability, within 6 months from the issuing of this report.

The Minister of Police to:

Take urgent steps to expedite the review of the National Key Points Act to
clarify its applicability to presidential security privileges and align it with the
Constitution and post-apartheid developments; and

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1 1 .3.2. Ensure that no further security measures are installed at the President's
private residence at Nkandla, except those determined to be absolutely
necessary for the functionality of already installed measures.

11.3.3. The Nkandla Project does not set a precedent for measures implemented in
respect of any future President, Former President, Deputy President and
Former Deputy President

1 1 .4. The National Commissioner of the SAPS to:

11.4.1. Identify officials that were and may still be involved in the Nkandla Project
and implement measures to identify why prescripts were not complied with
and on the basis thereof decide if disciplinary action should be taken; and

11.4.2. Assist the Minister of Police in familiarizing himself with the contents of and
his responsibilities under the National Key Points Act and the Cabinet Policy
of 2003 and ensure that in future officials assisting Ministers to take action
under any law include, in each relevant submission, a copy of the legal
instrument in question and an outline of all steps required of the Minister.

1 1 .5. The Director-General of the DPW to take urgent steps to:

11.5.1. Identify officials that were and may still be involved in the Nkandla Project
and implement measures to identify why prescripts were not complied with
and on the basis thereof decide if disciplinary action should be taken;

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1 1 .5.2. With the assistance of the National Treasury, obtain advice from an

independent and reputable security consultant on the security measures that
were necessary for the protection of the President and estimated legitimate
costs thereof. On the basis of this information, the DPW to determine the
extent of the over expenditure on the Nkandla project and to obtain legal
advice on the recovery thereof;

1 1 .5.3. With the assistance of the National Treasury, determine the extent to which

the SAPS and the DOD should be held liable for the expenditure incurred in
the implementation of the Nkandla Project and to recover the amounts
accordingly;

11.5.4. Take urgent steps to enter into a lease agreement with the KwaZulu-Natal
Ingonyama Trust Board in respect of the property occupied by the state
adjacent to the President's private residence;

1 1 .5.5. Take urgent steps to relocate the park homes to another organ of state that
requires temporary accommodation;

1 1 .5.6. Review the delegation of authority to Regional Offices of the Department;

11.5.7. Ensure that all DPW staff involved in supply chain management is properly
trained on deviations from the normal prescribed procurement processes;

1 1 .5.8. Ensure that all DPW staff involved in the implementation and execution of
projects are properly trained and capacitated to manage projects assigned to
them;

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1 1 .5.9. Comply with the provisions of GIAMA in respect of the assets acquired as a
result of the Nkandla Project; and

11.5.10. Develop a policy for the implementation of security measures at the private
residences of the President, Deputy President and former Presidents and
Deputy Presidents.

1 1 .6. The Secretary for Defence, to take urgent steps to:

11.6.1. Consolidate prescripts relating to the medical, transport and evacuation of
Presidents, Deputy Presidents, former Presidents and former Deputy
Presidents;

1 1 .6.2. Determine the role played by DOD Officials, and in particular the SAMHS, in
the Nkandla Project to ascertain if it was in line with their remit and if legal
authority boundaries and procedures were complied with; and

1 1 .6.3. Ensure certainty and accountability in respect of the future implementation of
measures relating to 1 1 .6.1 above.

12. MONITORING

12.1. In order to monitor and ensure the implementation of my recommendations

indicated above, the following steps must be taken:

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12.2. When the President submits this report and his intentions regarding the
findings and remedial action, within 14 days of its receipt, the Director
General in the Presidency should notify my office and Cabinet.

1 2.3. Accounting Officers of all organs of state required to take remedial action, are
to provide implementation plans to my office not later than 01 May 2014.

12.4. Status reports on implementation to be submitted by the affected accounting
officers within three months and final reports on action taken to be submitted
within 6 months of the issuing of this report.

1 2.5. Public Office bearers in affected organs of state are to ensure compliance.

"Let it never be said by future generations that indifference, cynicism or selfishness
made us fail to live up to the ideals of humanism which the Nobel Peace Prize
encapsulates." President of South Africa, Nelson Rholihlahla Mandela

ADV. T N. MADONSELA
PUBLIC PROTECTOR
REPUBLIC OF SOUTH AFRICA

19 March 2014

Assisted by the Branch: Good Governance and Integrity, Public Protector SA

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